A new report by Who Profits exposes: SodaStream misleads consumers by labeling settlement products as ‘Made in Israel’

The company, based in Mishor Edomim Industrial Park, an Israeli settlement in the West Bank, markets its devices and bottles under a ‘Made in Israel’ label.  By doing so, SodaStream (also known as Soda Club), world leader of home beverage carbonating devices, misleads consumers in Europe and the United States.

SodaStream misleadingly markets its devices and bottles under the Made in Israel label while in fact these products were manufactured in the Mishor Edomim Industrial Park, an illegal settlement in the occupied West Bank.

The company has recently faced a ruling by the European Court of Justice, stating that goods produced in settlements should not be considered as made in Israel and enjoys the tax exempt of the EU-Israel Association Agreement.

The report was published by Who Profits from the Occupation, a research project of the Coalition of Women for Peace. The project investigates Israeli and international corporate involvement in the Israeli occupation.

Tamara Traubmann, co-author of the report:

The report shows that exploitation and deception are an inevitable part of commercial production in the occupied area. Settlement production benefits from low rent, special tax incentives, and lax enforcement of environmental and labor protection laws. In addition, it many times enjoys preferential trade agreements as if these were products manufactured in Israel.

Using SodaStream as a case study, the report discusses key issues in industrial production in the illegal West Bank settlements, 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 settlement companies is based, at least in part, on the structural advantages that production in Israeli settlements enjoys, such as tax incentives, lax enforcement of regulations, as well as additional governmental support.

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 the location in a settlement. SodaStream admits 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.

The report can be found here: http://www.whoprofits.org/articlefiles/WhoProfits-ProductioninSettlements-SodaStream.pdf