SodaStream Update | May 2013

Update | May 2013

Soda Stream’s main production facility still operates in the settlement industrial zone of Mishor Adumim. However, recent publications suggest that the company is preparing the ground for a future withdrawal from the occupied Palestinian territories.

The Origin of SodaStream Products

In the last few months, SodaStream representatives have repeatedly claimed that the company’s products distributed in Western Europe are manufactured within Israel and not in the SodaStream’s main factory in the settlement of Mishor Adumim.

As Who Profits demonstrated before, in 2012 the Alon Tavor site in the northern part of Israel was mainly a warehouse that handled the painting and assembly of the machines, while the Ashkelon site solely manufactured the flavored syrups. This didn’t prevent the company from spreading disinformation.

Comparing SodaStream annual reports for 2011 and 2012 to the American Stock Exchange, revels what seems to be a new strategy (see: http://bit.ly/PrnAQxhttp://bit.ly/12ZZ4h1).

While the 2011 report’s production section opens with the statement: “Most of our products are manufactured at our two Israeli facilities, in Mishor Adumim, east of Jerusalem, and in Ashkelon, on the Mediterranean coast”(P. 36), the 2012 report declares: “We now manufacture our products in over 20 locations around the world”. Immediately afterwards the company elaborates:

“Most of our products are manufactured at our facilities in Mishor Adumim, in disputed territory sometimes referred to as the”West Bank,” in Alon Tavor, in northern Israel, and in Ashkelon, on the Mediterranean coast of Israel […] We also outsource the production of certain components of our products to subcontractors in Israel and in China. In addition, we conduct CO2 refilling in Australia, Germany, the Netherlands, New Zealand, South Africa, Sweden and the United States (P.20).

Thus, SodaStream doesn’t operate 20 manufacturing facilities worldwide, but two in Israel and one in the OPT. The missing 17 production sites are allegedly the anonymous outsourced sites in Israel and in China (that only produce “certain components” of the soda stream products) and CO2 refilling stations. This misleading description creates the impression that the main factory in Mishor Adumim is a relatively negligible part in an international production chain, while in fact it is still Soda Stream’s core factory.

What really happens in the Alon Tavor Site?

The main new addition to Soda Stream manufacturing system as described in the 2012 report is the Alon Tavor site. In an interview to the Israeli newspaper – Globes (April 2013), CEO – Daniel Birnbaum declared:

“The products we manufacture at the Alon Tavor plant are sold in countries such as Sweden, Switzerland, Norway, Finland, and France, even though we have another plant at Mishor Adumim, because of the sensitivity in these countries to Israeli products manufactured beyond the Green Line.”

Yet, a thorough reading in the 2012 report refutes Birnboum’s claims, as the vast majority of SodaStream’s production process remains in the Mishor Adumin factory. The report details the various manufacturing functions taking place in Mishor Adumin, which include “metals, bottle blowing, machining, assembly, cylinder manufacturing, CO2 refills and cylinder retesting.” Comparing the scope of these activities with the plastic injection, painting, printing and assembly taking place in Alon Tavor, exposes a simple fact: full SodaSream products can’t be manufactured in the Alon Tavor site. Therefore, products distributed in Europe and elsewhere must originate in the West Bank.

Developing Manufacturing Capabilities within Israel

 Although at the moment SodaStream’s claims’ on full manufacturing capabilities within Israel are false, there are indications that the company is starting to develop production lines inside the Green line. At the third quarter of 2012, SodaStream started constructing a new factory within Israel, in the Lehavim Industrial zone in Negev desert. The company evaluates that the first stage of the construction will be completed in approximately 18 to 30 months. The 2012 annual report emphasizes, “Upon completion of the first phase, the new site will have all production capabilities necessary to produce all of our products”.

In addition, during April 2013, Birnbaum announced that the company is tripling the size of the Alon Tavor site, even as it continues to build a plant at the Lehavim industrial zone in the Negev (See, Globes: http://bit.ly/XTcadR).

Only time will tell if the construction of the new factory in the Negev and the expanding of the Alon Tavor site will mature into a full withdrawal from commercial activity in the occupied Palestinian territories. Until then, Who Profits research team will continue to monitor SodaStreams’ activities and to publish periodic updates on the developments.



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