Pepsi, Coke bottlers in occupied West Bank face can, sugar shortage

Border has been largely shut to commercial traffic since early September following deadly attack by a Jordanian gunman

PepsiCo and Coca-Cola bottlers in the West Bank are grappling with severe shortages of sugar and cans due to the extended closure of the Allenby Bridge, a crucial trade crossing between Jordan and the West Bank.

The border has been largely shut to commercial traffic since early September, following a deadly attack by a Jordanian gunman that killed three Israeli civilians.

The bottlers, key suppliers of soft drinks in the Palestinian territories, are struggling to maintain production. Hatim Omari, the manager of a Pepsi bottling plant in Jericho, revealed that the facility ran out of cans 15 days ago and has not received new shipments of sugar for over a month.

Previously, the plant sourced sugar from Saudi Arabia and transported cans via Jordan.

The production output of the Pepsi plant, which once produced 60 million liters of beverages annually, has now dropped by 35%.

As a temporary measure, the company continues bottling its drinks in plastic, but profit margins are slimmer compared to canned beverages.

Similarly, the Coca-Cola bottler in Ramallah is facing shortages of certain soft drink flavors due to the disruption in supplies of sugar and cans.

Imad Hindi, general manager of the National Beverage Company, warned that without immediate resolution, the private sector, including major bottlers, will face significant operational challenges.

Beyond supply shortages, Pepsi and Coca-Cola’s sales in the region have been further affected by consumer-led boycotts in some Muslim-majority countries, where local consumers have begun to shun US-based brands due to geopolitical tensions.

The ongoing conflict in the Middle East, particularly the Israel-Hamas war that began in October 2023, has disrupted several global supply chains.

The closure of key trade routes and attacks on cargo ships have forced companies to reroute shipments, significantly driving up costs for businesses in the region.

According to Hindi, operating costs in the Palestinian territories are about five times higher than in neighboring countries.

In Gaza, the situation is even more dire.

A $25 million Coca-Cola plant was destroyed during the conflict, while a Pepsi bottling facility was severely damaged and ceased operations in October 2023.

PepsiCo’s CEO, Ramon Laguarta, acknowledged the impact of geopolitical tensions on business operations in the Middle East, stating that the outlook for the region remains uncertain.

The bottlers, essential to the local economy, are now operating under significantly reduced capacity.

The Pepsi plant in Jericho, for instance, has reduced its workforce shifts from three to one, leaving only 200 employees at work.

Local businesses are finding it increasingly difficult to cope with the disruption, which may worsen if the closure at the Allenby Bridge persists.

Despite the challenges, bottlers are pressing for solutions, but the long-term future of these operations remains uncertain, with further supply chain disruptions expected if regional instability continues.