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PepsiCo

PepsiCo

Industry: 
Food and Beverage
Value of USG Contracts: 
25
Symbol: 
NYSE:PEP
States: 
IL
NY
TX
Country: 
USA
Contact Information: 
Sources: 

Over the last three presidential administrations, the United States government has granted Pepsi 16 special licenses to do business in Iran. (New York Times, "Companies with Permission to Bypass Sanctions," 12/24/10)

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"This license authorized Pepsi to sell its products in Iran. The company has also been licensed to sell its products in Sudan. A company spokesperson said that the company was abiding by United States law: 'When it comes to politically sensitive markets, we rely on rules set by the U.S. Government, and we're committed to adhering to those rules, however they may evolve.'" (New York Times, "Licenses Granted to U.S. Companies Run the Gamut," 12/24/10)

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An AP review of corporate SEC filings found dozens of companies that have done business in Iran in recent years or said their products or services may have made it there through other channels. Some are household names: PepsiCo, Tyson Foods, Canon, BP Amoco, Exxon Mobil, GE Healthcare, the Wells Fargo financial services company, Visa, MasterCard and the Cadbury Schweppes candy and beverage maker. (Associated Press, "From bull semen to bras, Iran still buys American," 7/9/08)

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"The only visual clues that these lunching ladies aren't dining at some smart New York City eatery but in the heart of Washington's Axis of Evil are the expensive Hermès scarves covering their blond-tipped hair in deference to the mullahs. And the drink of choice? This being revolutionary Iran, where alcohol is banned, the women are making do with Coca-Cola. Coca-Cola? Isn't corporate America prohibited by Washington's sanctions from doing business in Iran? Yes, for the most part, says U.S. Treasury spokeswoman Molly Millerwise. But Treasury has bent the rules for foodstuffs, a loophole through which American drinks giants Coca-Cola (Charts) and PepsiCo (Charts) have been able to pour thousands of gallons of concentrate into Iran via Irish subsidiaries. And that has allowed these brands, so much a symbol of America - and so much an affront to Iran's conservative clerics - to open another front in their global cola war. After just a few years back in Iran, Coke and Pepsi have grabbed about half the national soft drink sales in what is one of the Middle East's biggest drinks market... Coke and Pepsi shrug off the hardliner rhetoric and insist they are aren't breaking any laws - American or Iranian - by licensing products in Iran through their concentrate subsidiaries in Ireland. Says Pepsi spokesman Dick Detwiler: 'PepsiCo has no equity investment in Sasan or any other enterprise in Iran and has no relationship with the government of Iran. We sell in strict accordance with all applicable U.S. laws and restrictions.' Coke spokesman Charles Sutlive echoes Pepsi's line, adding that Coke, which also licenses Fanta, Sprite and Dasani water through Khoshgovar, has 'no tangible assets in Iran'... But the fiercest battle is being fought in the marketplace, where Zamzam is defending its estimated 50 percent share of Iran's $1 billion in annual drinks sales, and Coke seems to have a clear edge over Pepsi. Shopkeeper Shahgholi owns a store in downtown Tehran around the corner from the former U.S. embassy, today a museum displaying 'U.S. atrocities' that draws few visitors. 'Nine of out ten bottles I sell are Coke,' he says. Sasan's Abadi says Pepsi and Coke share about 40 percent of the market, but Khoshgovar commercial manager Fahime Askari puts Coke's market share way ahead of Pepsi's. Reliable sales figures are hard to come by. Coke may be the real thing in Iran, but you won't hear that familiar slogan here. Washington's rules forbid U.S. companies to provide their licensees marketing support in Iran. It wouldn't be welcomed anyway by the mullahs, who regard America-themed advertising as spiritual pollution. 'Because of the relationship between Iran and America,' Abadi says, 'we are not allowed to advertise in public places.'" (Fortune, "Iran's cola war," 2/6/07)

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"Both Pepsi and Coca-Cola have factories in Iran." (Agence France Presse, Iran TV urges boycott of Zionist products," 7/19/06)

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"Both companies send the syrup to independent companies in Sudan and Iran, which then produce the drinks in their own factories, selling them in bottles and cans identical to Coca-Cola and Pepsi containers found elsewhere. A Coca-Cola spokesman, Dana Bolden, said the primary motive for operating in Sudan and Iran was 'to ensure quality control and protect our trademarks with the independent bottler.'" (The International Herald Tribune, "Coveted U.S. products find way past sanctions," 5/27/08)

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“There's also an undercurrent of anti-Americanism that has shaped Germany's Iran policy. Ruprecht Polenz, the top Christian Democrat on the Bundestag's Foreign Affairs Committee, has defended German trade with Iran by evoking the presence of Coca Cola and Pepsi in Iran.” (The New Republic, "Business as Usual: How Europe Will Undermine Obama's Iran Policy," 8/17/08)

Response: 

No response at this time.