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Since 1971

Pepsico •Shifts
Gaza Franchise

Jerusalem (JTA) — The de-
teriorating situation in the.
Gaza Strip has prompted
Pepsico Corp. to take a 7-Up 114
soft drink franchise from a
Gaza family that has held it 4
for three decades and give it ..4
to an Israeli firm.
But in a move emblematic,
of the troubled strip, the
family is not giving up -
without a fight. They are su-
ing Pepsico in a New York A
court.
Franchise loser lm4
Mohammad al-Yazji, whose,
sales dropped by as much as
70 percent following the .4
outbreak of the intifada five
years ago, blames the loss of
his franchise on the peace
■ ••1
process.
He told the Israeli daily
Yediot Achronot that Pep:'
sico is not renewing his fran- ,
chise because it no longer ' 1
fears other Arab countries
will respond with a boycott.
Pepsico claims Mr. Yazji 11.4
"did not honor his contrac-
tual commitments.'
However, it hopes to reach a
solution that "would enable
him to continue his present - 1
activity in Gaza."
Mr. Yazji is suing Pepsico 4
for $35 million for cutting off 4
its ties with his firm.
New franchise-holder,
Tempo, a long-established-
Israeli soft drinks firm, said
it did not rule out the possi-
bility of purchasing equip- 1
ment and services from the
Gaza company to shift the 4'4
7-Up 'business to Israel "in
• 4
an orderly manner."
Family contacts in Leb- 4
anon helped the Yazjis win a
franchise for manufacturing
7-Up in the Gaza Strip four ,
years before the area came 1
under Israeli military rule . 4
in the 1967 Six-Day War.
The franchise developed 4
into a gold mine, and the
market for 7-Up expanded 4
after the Six-Day War into .4
the administered territories -1
and Israeli Arab villages.
...4
Success had propelled Mr.
Yazji to the post of chairman i
of the Gaza Manufacturers
Association.
His father, Haj Tawfik,
became a member of the lig
Gaza Municipal Council and___A
a founder of Bank of"
Palestine in the strip.
Tough competition from
Israeli soft-drinks blocked 4
its penetration of the na- 4
tional market in Israel.
The outbreak of the Pales- 1.4
tinian uprising cut sharply
into sales that had reached
$6 million annually.