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Wednesday, March 2, 2011

WikiLeaks: How the Cola war was won in Libya

An unpublished US diplomatic cable obtained by WikiLeaks tells the previously undisclosed story of how an American corporate powerhouse -- the $35-billion Coca-Cola Co. -- got caught up in a fierce fraternal dispute between two of Libyan leader Muammar Gaddafi's sons.
The contretemps among the freres Gaddafi over a local bottling plant escalated into a heavily armed confrontation resembling a Hollywood gangster film, as a classified 2006 US cable put it.
"You know the movie 'The Godfather'? We've been living it for the last few months," a businessman involved in the dispute was quoted in the cable as telling an official from the US diplomatic mission in Tripoli.
The cable, which was made available to Reuters by a third party, centers on a bottling plant in Tripoli that was shut down for three months. It had been seized by troops loyal to Mutassim Gaddafi, a son of Muammar, who at the time was feuding with one of his brothers, Mohammed. (Another State Department cable suggests a third Gaddafi son, Saadi -- better known as the family's professional soccer player -- may also have been involved in the squabble, though no details of his role are given.)
Eventually, the American diplomatic mission in Tripoli, known then as the US Liaison Office, sent a firm protest to the Libyan government. The document states that around the same time, Mohammed Gaddafi, possibly under pressure from his sister Aisha, a family peacemaker, apparently agreed that shares owned by the Libyan Olympic Committee, which he led, would be sold to a third party.
Shortly afterward, the cable says, Mutassim's men left the Coke plant, ending the family standoff, but not before employees of the plant received threats of bodily harm and a Gaddafi cousin was stuffed in the trunk of a car.

The Coca-Cola confrontation is among numerous tales about endless squabbling within the Gaddafi clan recounted in State Department cables. Among other things, the incident underlines the difficulties faced by foreign companies operating in Libya even after the US and United Nations began to scale back sanctions following Muammar Gaddafi's decision in late 2003 to abandon his nuclear weapons program.
A spokesman for Coca-Cola acknowledged there had been "some uncertainty" surrounding Coke distribution arrangements in Libya during the period described in the cable. But the problem was "resolved amicably" by the end of 2006, the spokesman said, and since then, Coca-Cola had been operating normally in Libya until the onset of the current unrest.
A spokesman for the State Department said: "We will decline to comment on any particular cable. The US has taken aggressive action in recent days to freeze the assets of the Gaddafi family. Thus far, more than $30 billion in assets have been blocked."

Back when Libya was isolated by economic sanctions, its Coca-Cola supply was limited to consignments of the beverage bottled at a plant in Tunisia and transported to Tripoli and Benghazi.
After US and international trade embargoes on Libya began to ease, the Tripoli plant was established. It was co-owned by what the cable describes as a British company called Ka'Mur -- whose name was a reference to two embargo-era Libyan soft-drinks -- and by the Libyan Olympic Committee, headed by Mohammed Gaddafi.
Immediately after this joint venture was set up, the State Department cable says, the embargo-era Libyan distributor of bottled Coke sued the group behind the newly-opened plant, alleging breach of contract. A complaint was also sent to Coca Cola International alleging that the bottling plant operators had "stolen the franchise" from the previous distributors, according to the cable. The bottling plant operators counter-sued.
Then, on December 28, 2005 -- two weeks after the Tripoli plant began turning out locally-bottled batches of Coke -- "two military cars carrying armed personnel without clear identification illegally broke into the facility, asked the employees to leave the premises and shut down the plant," according to an account of the incident a businessman gave to US diplomats.
The US mission in Libya learned from other sources that the troops were loyal to Mutassim Gaddafi, who, after the Coca-Cola dispute was resolved, was named Libya's national security adviser.
According to the State Department cable, Mutassim bore a grudge against his brother because he had "taken over" the embargo-era domestic soft-drink business in the late 1990s when Mutassim had been exiled to Egypt for "insubordination" against their father. (Another cable says the "rumor" was that Mutassim had been linked to a coup attempt.)

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