Bloomberg News

McDonald’s Israel Licensee Rejects West Bank Store Proposal (1)

June 27, 2013

McDonald’s Corp. (MCD:US)’s licensee in Israel rejected a proposal to open a restaurant in a mall in a West Bank settlement, sparking criticism from pro-settler groups and supermarket-chain owner Rami Levy.

The closely held company, owned by Omri Padan, declined to add a store in Ariel because it is beyond the 1967 Israeli border, Levy, who is developing the mall through a private company, said by telephone. The licensee’s representatives said in an e-mailed statement that Padan has always had a policy of remaining within that border.

“They are making a mistake, and they shouldn’t mix politics with business,” said Levy, who has signed on to a group of 120 Israelis supporting a peace pact with Palestinians. “Business serves the interest of both peoples because it gives them jobs.”

The decision by Padan, a co-founder of the Israeli group Peace Now, places a brand widely seen as a symbol of American culture into one of the most contentious issues in the Jewish state. U.S. Secretary of State John Kerry is trying to revive talks between Palestinians and Israelis even as Israel approved plans for 69 new housing units in an eastern section of Jerusalem.

“Our partner in Israel has determined that this particular location is not part of his growth plan,” Becca Hary, a company spokesperson, said in an e-mail.

Padan’s move is a public-relations “disaster” for McDonald’s in Israel, Dani Dayan, chief foreign envoy of the Yesha Council, an organization that represents the Israeli settler movement, said by telephone.

“McDonald’s Israel are entitled to their politics,” he said. “I think the CEO of McDonald’s Israel didn’t ask himself just how much of a consensus Ariel is for Israelis.”

Israel Boycott

Padan’s decision follows calls made by various groups to boycott Israel because of its occupation of territories captured from Jordan during the 1967 war. South Africa and the European Union have sought to label Israeli imports from the territories, and physicist Stephen Hawking decided in May to cancel his participation in Israeli President Shimon Peres’s annual conference.

“In a democratic state, everyone has the right to choose where they want to live and where they want to open their business,” Yariv Oppenheimer, director of Peace Now, said by telephone. “You can’t force someone who disagrees with the settler ideology to open a restaurant in the settlements. I think it’s very positive that there are businesspeople that don’t think just about their revenue.”

The Ariel mall, being built in partnership with Mega Or Holdings Ltd. (MGOR), will cost about 150 million shekels ($41 million), Levy said. Levy, a Jerusalem native, is the chief executive officer and controlling shareholder of supermarket chain Rami Levi Chain Stores Hashikma Marketing 2006 Ltd. (RMLI), whose shares have gained 33 percent on the Tel Aviv Stock Exchange this year.

To contact the reporter on this story: David Wainer in Tel Aviv at dwainer3@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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  • MCD
    (McDonald's Corp)
    • $93.53 USD
    • -0.22
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