Production in Settlements: The Case of SodaStream Mar 2011
Using SodaStream as a case study, a new report by Who Profits discusses key issues in industrial production in illegal West Bank settlements. SodaStream is a manufacturer of home beverage carbonating devices, whose main production site is in the West Bank Settlement of the Mishor Edomin Industrial Zone. The report provides an extensive overview, including the identity of the manufacturers, employment conditions, land confiscation and trade in settlement products.
The report shows how the success of SodaStream and other companies which produce in settlements is based, at least in part, on the structural advantages that these companies enjoy, such as tax incentives, lax enforcement of regulations, as well as additional governmental support. The report also exposes the manner in which the company conceals the fact that its products are manufactured in a West Bank settlement by using the Made in Israel label. The company, therefore misleads consumers to believe that its products are manufactured in Israel rather than in occupied land.
The business of SodaStream is growing rapidly. Its products are sold in 39 countries and can be found in retail stores like Macy’s, Bed Bath and Beyond, Bloomingdale’s, Coop, Carrefour and Migros. On November 8, 2010, the company has gone public and its shares are traded on NASDAQ. The SodaStream devices are especially popular in Sweden; the company has recently announced that it has sold more than 1 million devices there.
The report provides an unprecedented insight into the internal considerations of a settlement producer, weighing consumer boycotts and possible negative publicity against the economic benefits of operating from a settlement. By its own admission, SodaStream states that calls for boycott are indeed a "risk factor" and a cause for "rising political tensions and negative publicity". However, the company declares that moving its factory out of the settlement would require the expenditure of resources and, more importantly, "limit certain of the tax benefits for which we are currently eligible." These benefits stem from the fact that the Israeli government provides economic incentives, including tax deductions, for businesses operating in West Bank settlements.