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Jewish Refugees Lose To Coca-Cola

A judge has given victory to franchisor Coca-Cola in its battle with a Jewish family who fled Egypt in 1965.

From 1938 to 1962, the Coca-Cola company did business with the Bigio family, leasing land and buying products from the family companies. In 1962, the Egyptian government was in the midst of expelling the Jews and the Nasser government took the Bigio company assets. The family fled Egypt and now resides in Canada.

In 1993, the Egyptian government sold the former Bigio family assets, and Coca-Cola bought 42% of the stock in the now-privatized company.

The Bigio family brought suit against Coca-Cola, alleging that Coke knew of the Bigio claims and that Coke was now knowingly trespassing on Bigio property. Coke responded that they had purchased property in a lawful sale conducted by the government of Egypt, and had paid for that property.

Bigio's attorneys also alleged that Coca-Cola had been unjustly enriched by purchasing the seized Bigio property, likening Coca-Cola to someone who knowingly purchases stolen property and then asserts that since it paid the thief, the property rightfully belongs to Coke.

Coke's attorneys argued that "if there was enrichment, it was Egypt's."

Coke moved for dismissal of the case pursuant to FRCP 12(b)(6), and the Bigio family moved for summary judgment.

After many years of litigation, and several initial victories for the Bigio family, a federal judge ruled last week that Coke is entitled to dismissal of the case.

Those interested in the legal rationale may read the opinion of the court.

Those interested in the moral rationale of Coca-Cola's action will need to look elsewhere.

Author's Note: Given that some readers are unfamiliar with the reasons why your choice of Coke or Pepsi is a political statement in much of the Middle East, this background is added:

  • There is a long and complex history of Coca-Cola and allegations of anti-Semitism, going back to Coke's operations in pre-WWII Germany, and the involvement of local Coke execs in the Nazi party.
  • Coke sponsored the infamous Nazi showcase Olympics in 1936.
  • By 1939, Coke had 43 bottling plants and 600 distributors in Nazi Germany.
  • With the outbreak of war Coke's former head man in Germany--Max Keith--developed Fanta (from the german "fantasie") and in 1960 Coke bought Fanta and now sells it worldwide. (See "Coca-Cola in a Nazi Uniform")
  • The brilliant marketing campaign by Coke's legendary leader Robert Woodruff largely erased Coke's ties to the Nazis...in the public mind, if not in the historical record.
  • After the founding of the nation of Israel, Coke made a perfunctory effort to open a plant and was relieved when the application was denied.
  • In 1961, the head of Coke's bottling operation in Egypt said that there would never be a Coke franchise granted in Israel.
  • The public statement of what was an unspoken policy created a backlash for Coke in the US, which was forced to open a plant in Israel and thereby forfeit the Arab market.
  • By 1993 (the same year Coke bid for the assets seized from the Bigio family) archrival Pepsi was firmly entrenched in the by-then lucrative Saudi market (from which Coke had been banned).
  • Pepsi International got 7% of its sales from Saudi Arabia alone in 1993.
  • Even today, there are parts of the Middle East where your choice of Coke or Pepsi is a political statement.
  • Coke leads in Israel, but remains far behind Pepsi in both Egypt and Saudi Arabia.

It is not an unreasonable possibility that Coca-Cola (which was well aware of the history of the Bigio family--see the legal pleadings and the Bigio family website) quite deliberately purchased the assets and intended to benefit from the controversy.

Purchasing assets seized from Jews is not a problem in much of the Middle East, and is likely a net plus in the Egyptian and Saudi consumer markets.

AttachmentSize
Bigio v Coca-Cola OPN Aug2010.pdf142.65 KB
Bigio's Memo of Law in Support of Motion Sept 2009.pdf653.29 KB
(Bigio v. Coca-Cola) Affirmtn of R. Bigio Sept 2009.pdf834.21 KB
(Bigio v. Coca-Cola)Bigio Surreply Oct 2009.pdf163.53 KB
(Bigio v. Coca-Cola)Coke Memo of Law Oct 2009.pdf751.47 KB
(Bigio v. Coca-Cola)Coke response Nov 2009.pdf118.38 KB
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