No lost sleep over boycott threat

TEL AVIV (JTA)-Of the 200,000 wine bottles Yakov Burg produced last year, 16,000 went to Europe.

The possibility of a boycott and repeated rumblings that Europe is planning to label goods produced in the settlements could decrease that number, but Burg isn't worried.

The CEO of Psagot Winery, which is located in a settlement of the same name in the hills of the central West Bank, Burg prides himself on running a Jewish-owned business in the West Bank, even welcoming groups of Christian Zionists who want to volunteer during the harvest.

The winery's location, though, also makes it a prime target for boycotts aimed at goods produced in the settlements.

"There are a lot of places that won't buy the wine, so of course there's damage," Burg told JTA. "It doesn't scare me. We need to fight the boycott, not just do what they want."

The effort to boycotts goods produced in the West Bank, long an objective of anti-Israel activists and some Jewish critics of the Israeli occupation, has achieved some notable victories in recent weeks.

Last month, PGGM, the largest Dutch pension fund, announced it was divesting from five Israeli banks because of their involvement in financing Israeli settlements. That was followed by an announcement that Denmark's Danske Bank was blacklisting Israel's Bank Hapoalim over its settlement activity. Sweden's Nordea Bank has asked two other Israeli banks for more information about their activities in the settlements.

In the United States, settlement goods were in the news recently after actress Scarlett Johansson came under fire for representing SodaStream, an Israeli company that produces home soda machines at a factory in the West Bank.

And in Europe, the United Kingdom and the Netherlands already label goods made in the settlements, and the European Union has threatened repeatedly to take the labeling continent-wide. U.S. Secretary of State John Kerry warned last week that Israel could face even greater boycott pressure if peace talks with the Palestinians collapse.

But several CEOs of companies that operate factories in the settlements acknowledged that while boycotts could hurt sales, they don't yet represent a serious threat to business.

Yehuda Cohen, CEO of the plastics company Lipski, which has a factory in the northern West Bank Barkan industrial park, says sales dropped 17 percent in 2010 when local Palestinians started boycotting his products. His company has since recovered, growing by 18 percent last year.

Though only a fraction of Lipski's products are shipped abroad-18 percent of total sales are for export, of which a majority goes to Europe-Cohen acknowledges that the EU move to label settlement products is a real threat. Labeling settlement products, Cohen says, could hamper relations with retailers.

"I don't think we've come to the level of a boycott, but labeling is half a boycott," Cohen said. "The retailer will say, 'I don't want problems. Israel is not acting well.' "

A European boycott could have a much larger impact on SodaStream, which according to a 2012 Bloomberg News report looks to Europe for a majority of sales. The company's CEO, Daniel Birnbaum, subsequently told the Forward recently that having a factory in a settlement was a "pain in the ass."

The impact of a boycott, though hardly irrelevant, would be more limited for Psagot and Lipski, neither of which are as reliant on European business.

But neither Burg nor Cohen share Birnbaum's sentiments about the virtues of operating a business in the West Bank. Nor does Rami Levy, the head of the budget supermarket chain Rami Levy Hashikma Market, which operates three locations in the West Bank.

For Burg, his vineyard's location is in part an ideological statement of opposition to a Palestinian state. Cohen said he supports Israeli-Palestinian peace talks and the goal of a two-state solution. Like other CEOs of companies with West Bank operations, he believes his company furthers the cause of peace by giving jobs to Palestinians.

"Not only does it not do damage, it provides an example of how to live together, how we can do business together," Levy said. "When you open businesses, you create more jobs. Just don't discriminate based on religion, race and nationality."

Levy, whose chain employs about 2,000 Palestinians, was part of a delegation of 100 Israeli businessmen to the World Economic Forum in Davos, Switzerland, last month aimed at encouraging a peace agreement. More than half the 90 employees of Lipski's West Bank factory are Palestinians. Cohen employs four Palestinians out of 20 total employees.

Hilik Bar, who chairs the Knesset Caucus for Furthering Relations Between Israel and Europe, said Levy's argument won't convince Europeans in the absence of a peace agreement. Bar strongly opposes boycotts, but the Labor party lawmaker believes the government needs to pursue peace more aggressively.

"It's not just the two [Scandinavian] banks; it is spreading everywhere," said Bar, who also chairs the Caucus for the Promotion of a Solution for the Israeli-Arab Conflict. "Israel has an image as a state worthy to isolate. It's a whole world we're giving up on economically as long as we don't come to a two-state solution."

But Levy claims not to be worried. Europeans, he says, talk a good game when it comes to settlements, but ultimately they're focused on the bottom line.

"If we let them profit, in the end they'll invest," he said. "The Europeans know one thing: Israel treats them well."