Sodastream pulls out of West Bank as sales continue to fall amid Scarlett Johansson controversy

Israeli fizzy drinks maker has faced calls for a boycott because of its factory in the occupied West Bank

Maria Tadeo@mariatad
Thursday 30 October 2014 10:25
Actress Scarlett Johansson is SodaStream's brand ambassador
Actress Scarlett Johansson is SodaStream's brand ambassador

Sodastream, the Israeli maker of fizzy drink machines, will close its West Bank factory after coming under intense pressure from pro-Palestine groups.

The company said the decision to pull out of Mishor Adumim - an industrial site located in the occupied West Bank- is "purely commercial" as part of a new growth plan following a string of disappointing financial results and poor sales.

However, boycott calls have intensified over the past year with pro-Palestine groups including the Campaign for Boycott, Divestment and Sanctions and Interfaith Boycott Coalition urging consumers to ditch Sodastream on the grounds that its presence in the West Bank violates the rights of Palestine.

Sodastream was hit a torrent of negative publicity after Hollywood actress Scarlett Johansson cut ties with Oxfam to become Sodastream's "global ambassador" earlier this year. The actress cited "fundamental differences of opinion" for her decision to leave the charity group, which opposes all trade from Israeli settlements, after eight years.

In an interview with The Independent in February, coinciding with the launch of its Super Bowl commercial, chief executive Daniel Birnbaum argued both Sodastream and Johansson were being "demonised" by the media. Birnbaum insisted company has no political agenda and provides equal opportunities for all employees, many of who are Palestinian.

Yesterday, SodaStream said its third-quarter revenue fell 13 per cent to $125.9 million from $144.6 million a year earlier. Net income plunged 42 per cent to $9.46 million from $16.40 million a year earlier. Sales in the US- its main market- fell 41 per cent for the three months ending September.

Sodastream has lost almost half of its market value this year after reporting three consecutive quarters of disappointing sales. The company is also battling a shift in consumer trends, with customers looking for products with fewer calories and less sugar.

In a conference call, Birnbaum conceded the company is operating under "challenging" conditions in the US and a change in course is needed to get Sodastream "back on track". As part of its business overhaul, the fizzy drinks maker said it will scale back on syrups to focus on water and less sugary products.

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