Doug Henwood's Blog, page 61

SodaStream update: The boycott is a “nuisance.” And “we’re Zionists.”

An hour after I hit the “publish” button on the SodaStream post, the firm’s publicist got back to me with an answer to my question about how BDS might be affecting sales. He referred me to a September 1 JTA story, which reports that the company is thinking of closing its West Bank factory (pictured below)—but purely for “financial reasons.” Those reasons do not include the boycott, which CEO Daniel Birnbaum dismissed as a mere “nuisance.” And, in case you missed the political point, he made the company’s position very clear: “We are not giving in to the boycott. We are Zionists.”

So, they‘d close the plant for financial reasons, but its location in the West Bank has nothing to do with those. Right. Also: it’s not just a beverage—it’s a political statement.

SodaStream: is BDS hitting where it hurts?

[See company’s response here.]

This morning, the Israeli-based fizz merchant SodaStream announced miserable preliminary financial results for the quarter ending September 30. Its stock promptly fell by over 20%, compounding losses over the last year. It’s now more than 70% off its all-time high set in July 2011, and the company may well put itself up for sale.

The  of the glum performance was not much of an explanation at all. From their official release:

“We are very disappointed in our recent performance,” said Daniel Birnbaum, Chief Executive Officer of SodaStream. “Our U.S. business underperformed due to lower than expected demand for our soda makers and flavors which was the primary driver of the overall shortfall in the third quarter. While we were successful over the last few years in establishing a solid base of repeat users in the U.S., we have not succeeded in attracting new consumers to our home carbonation system at the rate we believe should be achieved. The third quarter results are a clear indication that we must alter our course and improve our execution across the board. We have already begun a strategic shift of the SodaStream brand towards health & wellness, primarily in the U.S., where we believe this message will resonate more strongly with consumers….”

In other words, sales were off because not enough people are buying the product.

Media reports (like this one) glossed the company’s explanation with the commonplace that Americans are losing their taste for soda. But SodaStream’s fizz-inducing systems could be used to make bubbly water (0 calories) or effervescent fruit juices. You could probably even gas up your kale juice if you wanted to, which is beyond my imagining. According to the company’s nutrition information page, its flavors have about a third the calories of comparable sodas like Coke and Sprite. So if Americans are really losing their taste for the really sweet stuff, SodaStream should already be well-positioned as a possible alternative, not a victim of these changing preferences.

Not mentioned in either the company’s release or any news report I’ve seen: the global boycott of Israeli products. SodaStream is especially vulnerable, compared to a company based in Israel itself, because its major factory is in the West Bank settlement of Ma’ale Adumim. SodaStream has factories in Israel proper and elsewhere in the world, but its presence in the Occupied Territories make it particularly vulnerable to a boycott, a risk the company acknowledged in its most recent .

Earlier in the year, Scarlett Johansson was relieved of her role as her role as an “ambassador” for Oxfam, because the charity believed “that businesses that operate in settlements further the ongoing poverty and denial of rights of the Palestinian communities that we work to support.” That move attracted global attention. It may be that Johansson’s star power did more to publicize the boycott than it did the company’s products.

So is the Boycott, Divestment, Sanctions (BDS) movement against Israel costing a real-world company real money? SodaStream isn’t talking; a query to the firm’s publicist has gone unanswered, which is unusual behavior for a publicist who wants to talk. But it’s looking like the answer may well be yes.

Fresh audio product

Just added to my radio archive:

September 11, 2014 Dana Goldstein, author of Teacher Wars, on the history of education politics in the U.S. • Christian Parenti, author of this article, reclaims Hamilton for the left (and for climate politics)

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Newly added to my radio archive:

September 4, 2014 Rebecca Tiger, sociologist and author of Judging Addicts, on the history of punishment in the U.S., drug courts, and the marriage of the therapeutic culture to the carceral state

Fresh audio product

Just added to my radio archives:

August 28, 2014 , author of The First Civil Right, on the underestimated contributions of liberals to mass incarceration • Amy Binder, author of this article, on why Harvard grads flock to Wall Street

August 21, 2014 Chase Madar, author of this article, on overpolicing/overcriminalization in the USA • Jeff Smith, author of this article, on Ferguson, St Louis, and political science

Fresh audio product

Between vacation and KPFA’s fundraising, I’ve been delinquent at both producing new radio shows and updating the archive. Here’s some catch-up, freshly posted to my radio archive. The dates are links and will take you to the show’s page.

 

July 10, 2014 Heidi Shierholz of the Economic Policy Institute discusses the flabby, unsatisfying state of the job market • Sean Jacobs (one of the founders of Africa Is A Country) talks about the political economy of soccer.

August 14, 2014 Mark Ames on Silicon Valley wage-fixing and their selective libertarianism • Alex Vitale on broken windows and the militarization of policing

If you like this show, please support KPFA, without which it wouldn’t be possible. If you contribute—and there’s no reason you shouldn’t if you’re not broke—please mention Behind the News.

Fresh audio product

Catching up with a backlog…just posted to my radio archives:

July 3, 2014 Esther Kaplan, author of this article, on a plant closure in Tennessee and the dubious economic logic of offshoring • Alex Kane on what Israel is up to in the wake of the West Bank kidnappings

June 26, 2014 Sarah Stillman, author of this article, on the for-profit probation racket and “offender-funded justice” •Bruce Bartlett on the state of the Republican party after the Tea Party’s series of electoral defeats

June 19, 2014 Jennifer Taub, author of Other People’s Houses, on the deep history of the mortgage crisis • Margaret Gray, author of Labor and the Locavore, on the exploited workers behind the local food movement

 

Fresh audio product

Just added to my radio archives:

June 12, 2014 Suzanna Danuta Walters, author of The Tolerance Trap, argues against queer embourgeoisement • Tony Samara, lead author of The Rise of Renter Nation, on the affordability crisis for people who rent their dwellings

June 5, 2014 Art Goldhammer on European politics, with an accent on France • Nikil Saval, author of Cubed, on the history and sociology of the office

Plutonomy revisited

Business Insider has a write-up of a BoA Merrill Lynch report that declares that, the FT’s quibbles aside, Thomas Piketty is essentially right, and the super-rich is where the action is, so invest accordingly. (Never mind that Piketty utterly destroyed, in the most gracious manner imaginable, the newspaper’s economics editor Chris Giles’ half-assed critique.) The BoA Merrill report was written by Ajay Kapur, who is quoted by BI as saying:

When wealth and income are as concentrated as they are, and expected (a la Piketty) to get even more so, examining the ‘average’ consumer or ‘average’ investor makes little sense. Examining the fat tail – the behavior of the plutonomists, rather than that of the multitudinous many – is more advantageous to investors. Plutonomists determine and dominate spending and investment decisions and their magnitudes. Any analysis that does not tease out the skewed global income and wealth distribution, but focuses on the average is flawed from the start and is incomplete, as we step into its deeper extremes.

The word “plutonomy” rang a bell, and sure enough we’ve been here before. Back in 2005 and 2006, in the bubbly days before the financial crisis and Great Recession, Kapur wrote a series of reports for Citigroup, his then-employer, on the topic. Citi did its best to stem the circulation of the reports, demanding that websites that posted them take them down.

As a public service, lbo-news is reposting them. Evidently, the worst crisis in 80 years is not enough to keep the plutocrats down.

Here are the links (all PDFs—and I changed them since my first posting to confuse Citi’s plutonomy sniffer):

Plutonomy 1 (October 16, 2005)

Plutonomy 2 (March 5, 2006)

Plutonomy 3 (September 29, 2006)

Fresh audio product: Europe and Egypt

Just added to my radio archives:

May 29, 2014 Yanis Varoufakis on the European elections • Mohamad Elmasry on Egypt