Pepsi Defies Arab Boycott But Runs Into Israeli Foes

Ad rouses orthodox ire, while key Gaza employer could lose franchise

EVEN soft drinks run up against hard political realities in the Middle East, and even the "new generation" has to deal with old religious traditions.

That is the lesson Pepsi-Cola has learned as it launches itself into the Israeli market, defying an Arab boycott for the first time.

But the protests have come not from Arab governments that boycott foreign firms doing business in the Jewish state. Instead, trouble is brewing among religious Jews objecting to allegedly sacrilegious advertising, and with a Palestinian bottler whose business is threatened with disaster.

At one end of the spectrum, orthodox rabbinical authorities are debating whether to withdraw their seal of kosher approval from Pepsi. At the other, Muhammad Yazighi, whose bottling plant is the biggest private employer in the Gaza Strip, says he will "fight to the end" to keep his 7-Up franchise in the face of PepsiCo's new deal with an Israeli bottler.

Ultraorthodox rabbis are up in arms over the way Pepsi was launched here earlier this month, with an advertising campaign that began with a poster of an ape dragging its fists on the ground, and the caption, "Ten Million Years Before the Choice."

As the campaign progressed, more upright anthropoids developed in a chain of evolution leading through Neanderthal man, and then a sober and dull looking "Coca-Cola man," to a dynamic, skateboarding "Pepsi Kid."

The ultraorthodox object not only to the implication that man evolved from the ape, which runs counter to their belief in God's creation of man, but also to the the reference to "10 million years," which contradicts the Jewish tradition that the universe was created 5,752 years ago.

In consequence, the Badatz, the most important ultraorthodox rabbinical court, has threatened to withdraw its certificate of kashrut from Pepsi, thereby forbidding ultraorthodox Jews to drink the stuff.

Though normal kosher standards concern only the ingredients used in foodstuffs, and the way in which they are cooked, the most orthodox believers "are more rigorous," explains Ilan Greilshammer, an expert on the ultraorthodox. "They are concerned also by the spiritual environment" of their foodstuffs.

Gitam, the advertising agency handling the Pepsi account, has now modified its posters, removing the reference to "10 million years," and with it all the apes, leaving only a Neanderthal man to hint at evolution. Approval not crucial

"We are happy with [the new poster] and our client is happy with it," says a member of the Pepsi account team. "If the Badatz isn't, then we will give up on their certification. We won't lose much."

In fact, she says, the scandal has given Pepsi an unexpected boost. "The public's awareness of our problems with the Badatz is very great, and that has helped us, of course."

Mr. Yazighi's problems are less easily shrugged off, however.

His family has been bottling 7-Up, which was bought by PepsiCo four years ago, since 1962, employing 180 people in his Gaza plant. His franchise, which covers the territories occupied by Israel in 1967 and "extended territories," which means Israel itself, expires at the end of this year.

Since PepsiCo has now given its franchise for the same area to an Israeli company, Tempo, Yazighi has no idea what will become of his operation.

"I have heard nothing from PepsiCo" since the Tempo deal was announced, he says, "and I don't know exactly what their plans are" although he hopes to find out at a meeting next month in Cyprus with PepsiCo officials.

"Pepsi didn't speak to me, that's what makes me anxious," Yazighi says. "Only like that they said they did not want to renew my franchise, without any explanation." Bottling plant's troubles

Yazighi's operation has been fraught with difficulties, especially since the intifadah (uprising) began in December 1987. He was unable to sell his 7-Up in Israel, he says, "because many times bottles disappeared there and maybe people didn't like to buy directly from a producer in Gaza." He has been unable to import enough bottles to serve the West Bank market. And his plant is operating at only 20 percent of capacity, selling only to Gaza residents.

Despite these troubles, Yazighi says, "it is not so easy to leave my area after 30 years, and I will never give it up. I will give up Israel, but I am not ready to talk even about compensation for Gaza and the West Bank."

PepsiCo spokesman Barry Holt says Yazighi's future is still under discussion. "Our relation with that bottler is due to expire in the normal course of events, and we are in discussions on how to proceed," he says. "It is in the hands of the lawyers and under negotiation."

Yazighi says he wants good relations with PepsiCo, and insists that "any legal steps, any fighting, is my last step. I prefer to settle my problems with the company in a peaceful way."

But "this is our life," he adds. "And we will never give it up."