Costa Coffee Military Audit

1. Executive Summary and Strategic Overview

Subject: Forensic Audit of Costa Coffee / The Coca-Cola Company / Central Bottling Company (Israel)

Purpose: Assessment of Military Complicity and Occupation Sustainment

Date: November 27, 2025

This comprehensive forensic audit was commissioned to evaluate the material and ideological complicity of Costa Coffee—a wholly-owned subsidiary of The Coca-Cola Company (TCCC)—in the sustainment of the Israeli military apparatus (IDF), the settlement enterprise in the Occupied Palestinian Territories (OPT), and the broader infrastructure of the occupation. The analysis proceeds from the understanding that in a globalized conglomerate economy, complicity is rarely isolated to a single subsidiary’s retail footprint. Instead, it permeates through capital flows, brand equity transfers, and the operational conduct of exclusive regional franchisees.

The investigation reveals that while Costa Coffee’s direct retail footprint in Israel is characterized by “Market Drift” (vending and capsules) rather than a robust network of brick-and-mortar cafes, its integration into the Coca-Cola System exposes it to severe levels of complicity. The audit identifies the Central Bottling Company (CBC), also known as Coca-Cola Israel, as the primary vector of this complicity. CBC is not merely a bottler; it is a diversified conglomerate with deep structural ties to the Israeli Ministry of Defense (IMOD), illegal settlement infrastructure, and right-wing political advocacy groups.

Key Forensic Findings:

• Settlement Infrastructure: The Central Bottling Company operates a major distribution center in the Atarot Industrial Zone, an illegal Israeli settlement in Occupied East Jerusalem. This facility is built on expropriated Palestinian land and is integral to the logistics of supplying settlement populations.¹
• Resource Extraction: Through its subsidiary Tabor Winery, the entity engages in the agricultural exploitation of occupied territory, sourcing grapes from the West Bank and Golan Heights.⁴ Similarly, its dairy subsidiary Tara Dairy holds a majority stake in Meshek Zuriel, which has historical farming operations in the Jordan Valley settlement of Shadmot Mehola.⁵
• Institutional Sustainment of the IDF: Tara Dairy, as one of the three largest dairy producers in Israel and an “Authorized Supplier” to the Ministry of Defense, provides essential caloric sustainment (milk, cheese, yogurt) to the Israeli security forces. This constitutes direct logistical support.⁶
• Ideological Financing: Forensic financial tracking uncovered a direct donation from CBC to Im Tirtzu, a far-right extra-parliamentary organization dedicated to shielding IDF soldiers from war crimes investigations and promoting ultranationalist policies.⁸ This represents a shift from passive commercial operation to active ideological sponsorship.
• Parental Liability: The Coca-Cola Company (US) retains full ownership of Costa Coffee and maintains the franchise agreement with CBC despite decades of documented violations of international law (settlement operations). This creates a direct liability channel where profits from Costa Coffee contribute to the corporate ecosystem that sustains CBC’s operations.

The following report provides the rigorous data necessary to rank Costa Coffee and its associated entities on the Military Complicity Scale. The evidence suggests that while the consumer-facing brand falls within the lower bands of incidental contact, the corporate organism as a whole operates within the Moderate-High to High bands of militarized infrastructure and logistical sustainment.

2. Strategic Context: Defining Corporate Complicity in Asymmetrical Conflict

To accurately assess the complicity of a civilian consumable brand like Costa Coffee in a military occupation, one must first establish the parameters of “Dual-Use” in the context of the Israeli-Palestinian conflict. Unlike conventional state-on-state warfare where “military support” is defined by arms sales, the Israeli occupation relies heavily on Civilian-Military Fusion.

The sustainment of the occupation requires not just F-35 fighter jets, but also the normalization of settlement existence, the economic viability of industrial zones in the West Bank, and the continuous supply of logistics (food, fuel, water) to a conscript army that is deeply embedded in the civilian population.

2.1. The “Anchor Bottler” Liability Model

Multinational beverage corporations like The Coca-Cola Company typically do not own the bottling plants or distribution trucks in foreign markets. Instead, they employ an “Anchor Bottler” system. In this model, TCCC sells beverage concentrate and marketing rights to a local entity (The Central Bottling Company in Israel).

Critically, this legal separation is often used as a shield against liability. However, from a defense logistics perspective, the relationship is symbiotic:

1. Brand Equity Transfer: TCCC provides the global brand power (Coca-Cola, Sprite, Costa Coffee) that allows the local franchisee to dominate the market.
2. Royalty Extraction: The local franchisee pays royalties back to the parent company. Every bottle of Coke or Costa capsule sold in a West Bank settlement generates revenue that flows to Atlanta and London.
3. Governance Control: TCCC maintains strict “Supplier Guiding Principles.” The failure to enforce these principles regarding operations in illegal settlements (Atarot) constitutes tacit approval and strategic alignment.

Therefore, for the purposes of this audit, the actions of the Central Bottling Company (CBC) are treated as the operational manifestation of The Coca-Cola Company (and by extension, Costa Coffee) in the theater of operations.

2.2. Legal Frameworks and International Law

The audit evaluates operations against specific international legal standards to determine “Material Complicity”:

• The Fourth Geneva Convention (Article 49): Prohibits the Occupying Power from transferring parts of its own civilian population into the territory it occupies. Companies operating in settlements (like Atarot) facilitate and profit from this transfer.
• The UN Guiding Principles on Business and Human Rights (UNGPs): Requires business enterprises to respect human rights and avoid infringing on the rights of others. This includes a responsibility to conduct due diligence to identify and mitigate adverse impacts.
• International Court of Justice (ICJ) Advisory Opinions: The ICJ has repeatedly affirmed the illegality of the separation wall and the settlement regime.

3. Corporate Architecture: The Transnational Complicity Chain

The subject of this audit, Costa Coffee, does not exist in a vacuum. It is a node in a complex corporate web. Understanding this web is essential for tracing the flow of capital and complicity.

3.1. The Asset: Costa Coffee (Costa Limited)

Founded in London in 1971, Costa Coffee was acquired by The Coca-Cola Company in January 2019 for $4.9 billion (£3.9 billion).¹⁰ This acquisition transformed Costa from a British hospitality chain into a strategic asset of a US conglomerate.

• Operational Status: Costa acts as a wholly-owned subsidiary.
• Financial Integration: Revenues from Costa are consolidated into TCCC’s global financial reporting.
• Strategic Role: Costa provides TCCC with a platform to enter the “hot beverage” market, leveraging TCCC’s massive global distribution network—which in Israel is controlled by CBC.¹²

3.2. The Parent: The Coca-Cola Company (TCCC)

TCCC is the ultimate beneficial owner. It holds the power to grant or revoke franchise rights.

• Complicity Nexus: TCCC has been the target of global boycott campaigns (BDS) specifically because of its refusal to sever ties with its Israeli franchisee over settlement operations.¹
• Moral Hazard: By continuing to profit from a franchisee operating in Atarot, TCCC validates the economic viability of settlement industrial zones.

3.3. The Operator: The Central Bottling Company (CBC)

The Central Bottling Company (Coca-Cola Israel) is the “High Value Target” of this investigation. It is a private Israeli company, historically owned by the Wertheim family.¹⁶

• Monopoly Power: CBC controls approximately two-thirds of the Israeli soft drink market and owns major subsidiaries in dairy (Tara), water (Neviot), and alcohol (IBBL).¹⁶
• Defense Integration: As a dominant food and beverage supplier, CBC is structurally integrated into the national emergency supply chain, providing essential goods to the IDF and civilian population during conflicts.

Table 1: Corporate Entity Relationships

4. Forensic Target I: The Central Bottling Company (CBC)

This section details the specific operational activities of the Central Bottling Company that meet the criteria for “Militarized Infrastructure Construction” and “Logistical Sustainment.”

4.1. The Atarot Industrial Zone: Infrastructure of Occupation

The most critical evidence of material complicity is CBC’s physical presence in the Atarot Industrial Zone.

• Geopolitical Location: Atarot is located in Occupied East Jerusalem, north of the city center, on land expropriated from the Palestinian village of Beit Hanina. It is situated near the Qalandiya checkpoint and is separated from the West Bank hinterland by the Separation Wall.¹⁴
• Facility Details: CBC operates a massive regional distribution center and cooling house in this zone. The facility serves as a logistical hub for distributing products to Jerusalem and the West Bank settlements.²
• Impact Analysis:
  • Normalization: By anchoring a major multinational brand’s logistics in Atarot, CBC helps normalize the status of the settlement as a legitimate industrial area.
  • Economic Sustainment: CBC pays municipal taxes and fees to the Israeli authorities governing the settlement, directly funding the administration of the occupation.
  • Segregated Logistics: Operations in Atarot rely on the segregated road system designed for Israeli vehicles, reinforcing the infrastructure of apartheid.

4.2. Subsidiary Complicity: Tara Dairy and Institutional Supply

CBC expanded beyond beverages by acquiring Tara Dairy (Tara), the second-largest private dairy producer in Israel.⁵

• Ministry of Defense Contracts: The Israeli dairy market is highly regulated, and the IDF is the largest institutional consumer of food products.⁷ Snippets confirm that Tara Dairy is an “Authorized Supplier” to the Ministry of Defense.⁶ This designation allows them to bid on and fulfill contracts for supplying IDF bases, prison canteens, and field rations.
• Settlement Agriculture (Meshek Zuriel): Tara Dairy holds a controlling interest (~81%) in Meshek Zuriel Dairy. This subsidiary owns a dairy farm in Shadmot Mehola, a settlement in the Jordan Valley.⁵
  • Forensic Note: The Jordan Valley is a strategic zone where Israel maintains full military and civil control (Area C), often denying Palestinians access to water and grazing land. Sourcing milk from Shadmot Mehola constitutes the commercial exploitation of resources in occupied territory.

4.3. Subsidiary Complicity: Tabor Winery

CBC owns Tabor Winery, which is situated in the Galilee but sources grapes from vineyards in the occupied West Bank and the Golan Heights.⁴

• International Law Violation: The extraction of natural resources (agricultural produce) from occupied territory for the profit of the occupying power or its private entities is a violation of the Hague Regulations.
• Market Drift: These wines are distributed through the same logistical channels as Coca-Cola and Costa products, creating a unified supply chain of complicit goods.

4.4. Antitrust and Monopoly Power

CBC’s dominance is maintained through aggressive tactics that have drawn the ire of Israeli regulators. In 2019, the Israel Antitrust Authority fined CBC NIS 62.7 million (~$17.5 million) for abuse of monopoly power.¹⁷

• The Tactic: CBC was found to have threatened retailers that if they did not stock Tara Dairy products (which are less popular than competitors Tnuva or Strauss), they would be denied discounts or access to Coca-Cola products (which are essential for any retailer).
• Relevance: This demonstrates that CBC uses the power of the global brand (Coca-Cola) to force the market penetration of its local subsidiaries (Tara), effectively using American brand equity to prop up settlement-linked dairy operations.

5. Forensic Target II: Costa Coffee (The Asset)

Having established the complicity of the operator (CBC), we now examine the specific footprint of the Costa Coffee brand within this ecosystem.

5.1. Direct Operational Presence: “Market Drift” vs. Fixed Assets

Unlike in the UK, where Costa Coffee is a ubiquitous high street retailer, its presence in Israel is primarily through distribution channels rather than owned real estate.

• Retail Footprint: There is no evidence in the research materials of a large-scale network of “Costa Coffee” cafes in Israel comparable to Starbucks or Aroma. The primary mode of entry appears to be through the sale of consumables.¹⁰
• Vending Operations (Costa Express): Following the acquisition, TCCC announced plans to roll out Costa Express vending machines globally. In Israel, these machines would effectively be operated/serviced by CBC’s vending division, further integrating the brand into the settlement logistics network.¹²
• Capsules and Pods: Costa-branded Nespresso-compatible pods are sold in Israeli supermarkets and online retailers.¹⁹
  • Distributor: The distribution of these products falls under the purview of CBC as the exclusive franchisee. This means that revenue from every sleeve of Costa capsules sold in a Tel Aviv supermarket or a West Bank settlement settlement store (e.g., Rami Levy in Atarot) contributes to CBC’s bottom line.

5.2. The Rami Levy Connection

Research indicates that Costa Coffee products are likely sold in Rami Levy supermarkets. Rami Levy is a major Israeli supermarket chain notorious for operating stores in settlement industrial zones (including Atarot) to serve settlers.²¹

• Complicity Logic: If Costa Coffee products are distributed to Rami Levy stores in settlements, the supply chain physically crosses the Green Line. The delivery trucks (owned by CBC) utilize the occupation infrastructure to deliver British-branded coffee to illegal settlements.

5.3. Brand Whitewashing and Financial Fungibility

The defense of “Costa is just a coffee company” fails due to the fungibility of capital.

• Revenue Repatriation: Profits generated by CBC from the sale of Costa products in Israel (including in settlements) generate royalties. These royalties are repatriated to TCCC.
• Portfolio Diversification: By owning Costa, TCCC diversifies its revenue stream. A stronger TCCC is better able to weather boycott campaigns and maintain its strategic support for CBC.
• Student Union Boycotts: The student union at Bangor University (and others) explicitly targeted Costa Coffee because of its ownership by TCCC and the operations in Atarot.¹ This demonstrates that the reputational contagion is active and acknowledged by civil society groups.

6. Forensic Evidence of Ideological Support: The Im Tirtzu Dossier

A critical component of this audit is the transition from “Material Complicity” (selling goods) to “Ideological Support” (funding political actors). The investigation uncovered a direct financial link between the Central Bottling Company and the far-right organization Im Tirtzu.

6.1. The Donation

In 2015, a document from the Israel Corporations Authority revealed that the Central Bottling Company donated NIS 50,000 (~$13,850) to Im Tirtzu.⁸

• Secrecy: The donation was not public; it was uncovered through regulatory filings. Im Tirtzu’s director had requested the donation remain confidential, but the request was rejected by the Registrar of Non-Profit Organizations.⁸ This attempt at concealment suggests CBC was aware of the reputational risk associated with funding such a group.

6.2. Profile of Im Tirtzu

Im Tirtzu is an extra-parliamentary movement that positions itself on the far right of the Israeli political spectrum. Its activities are directly relevant to the “Military Complicity” audit:

• IDF Immunity Campaigns: Im Tirtzu actively campaigns to shield IDF soldiers from legal accountability for actions taken during combat. They have attacked Israeli human rights organizations (like B’Tselem and Breaking the Silence) that document war crimes, labeling them “moles” and foreign agents.⁸
• Nakba Denial: The group runs campaigns describing the Palestinian Nakba (the 1948 expulsion) as “nonsense”.⁸
• Academic Monitoring: They monitor and blacklist Israeli academics deemed “anti-Zionist.”

6.3. Audit Implication

By funding Im Tirtzu, CBC (and by extension, the Coca-Cola ecosystem in Israel) did not just sell soda; they invested in the political machinery that sustains the occupation and protects the military from scrutiny. This is a form of Ideological Complicity that places the entity in a different category than companies that merely sell dual-use goods. It signals a corporate ethos aligned with the militarist right wing.

7. Global Case Study: The Milco/Clover Acquisition (Exporting Complicity)

The complicity of the Central Bottling Company is not confined to Israel/Palestine. The audit of the Milco/Clover deal in South Africa illustrates how this entity exports its methodology and capital.

7.1. The Acquisition

In 2019, a consortium named Milco, led by the Central Bottling Company (holding a ~60% stake), acquired Clover Industries, South Africa’s largest dairy company.¹⁶

• Objective: To use Clover as a platform to expand CBC’s dairy and beverage operations across the African continent.²⁵

7.2. The Resistance

The acquisition triggered a massive backlash from South African trade unions (GIWUSA, FAWU) and the BDS movement.

• The Argument: Unions argued that allowing an Israeli company that operates in illegal settlements (Atarot) to purchase a strategic South African asset was a betrayal of the anti-apartheid struggle.²⁶
• Operational Impact: Following the takeover, Clover initiated massive restructuring, including factory closures and retrenchments (laying off thousands of workers) and significant wage cuts.²⁷
• Political Fallout: The strikes became a proxy battle over the Israeli occupation, with workers chanting pro-Palestinian slogans. The unions explicitly linked the “brutality” of the Clover retrenchments to the “brutality” of the occupation, framing CBC as a predatory actor in both theaters.²⁹

7.3. Forensic Takeaway

This case study confirms that CBC is an aggressive transnational actor. It utilizes the capital accumulated through its monopoly in Israel (and settlement operations) to acquire assets globally. TCCC’s continued partnership with CBC facilitates this global expansion.

8. Logistical Sustainment of the IDF

This section addresses the Core Intelligence Requirement: Does the company provide essential services (catering, transport, fuel) to IDF bases?

8.1. The “Authorized Supplier” Network

The Israeli Ministry of Defense (IMOD) relies on the civilian sector for food security.

• Tara Dairy: As established, Tara is a major player in the Israeli dairy market. In the highly centralized Israeli economy, the “Big Three” dairies (Tnuva, Strauss, Tara) share the institutional market.
• Shekem (Canteen) Supply: While the snippets do not show a direct contract for Costa Coffee served in mess halls, the Shekem (IDF canteen system) is stocked with products from the major distributors. CBC, controlling Coca-Cola, Prigat, and Neviot, is the inevitable supplier of soft drinks and water to these canteens.
• Wartime Logistics: During kinetic operations, such as the 2014 Gaza War and the 2023-2024 conflict, major food companies donate vast quantities of “care packages” to units on the front lines. Im Tirtzu (funded by CBC) has historically coordinated such logistical support.⁹

8.2. The Intelligence Campus Tender (Correction and Clarification)

Initial intelligence suggested a link between CBC and the construction of the new IDF Intelligence Campus in the Negev. A deeper forensic review of snippets ³⁰ clarifies this:

• Construction: The tender for the “Kiryat HaModi’in” (Intelligence Campus) was won by Shikun & Binui and Electra, not CBC.
• Service Provision: However, once constructed, these massive bases (housing 12,000+ personnel) require institutional catering and vending contracts. CBC, with its dominance in vending and beverages, is a prime candidate for the Sustainment Contracts of these facilities.
• Conclusion: We must distinguish between building the base (Construction) and feeding the base (Sustainment). CBC falls into the latter category.

9. Data Synthesis for Complicity Ranking

The following data points are synthesized to allow the Defense Logistics Oversight Committee to determine the appropriate ranking on the Military Complicity Scale.

Table 2: Forensic Evidence Matrix

9.1. The “Complicity Aggegration” Principle

While Costa Coffee as a brand exhibits behavior consistent with the Incidental (1.0–2.0) band (Civilian Parallel/Market Drift), the entity under audit—The Coca-Cola Company via its operational arm, The Central Bottling Company—exhibits behavior consistent with the Moderate-High (5.1–6.0) band.

The Defense Logistics Analyst must determine whether to rate the brand or the capital structure. Given the objective to identify “material or ideological support,” the capital structure analysis is paramount. The profits from Costa Coffee contribute to the solvency of a parent company that sustains the Atarot facility.

10. Legal and Reputational Risk Assessment

10.1. International Law Violations

The operation of the Atarot distribution center and the Shadmot Mehola dairy farm constitutes a direct violation of the Fourth Geneva Convention, specifically the prohibition against the transfer of population and the exploitation of occupied resources. This exposes the parent company (TCCC) to potential future litigation under universal jurisdiction statutes or liability claims in domestic courts.

10.2. Boycott and Social Risk (BDS)

The “Costa Coffee” brand is currently experiencing “Reputational Contagion.”

• Student Movements: The motion at Bangor University ¹ and the general “Don’t Buy Apartheid” campaigns ³⁴ explicitly target Costa due to the Coca-Cola link.
• Regional Markets: In the Middle East, American brands (including Costa franchisees) have reported revenue declines due to the perception of pro-Israel bias.³⁶
• Substitute Goods: The emergence of “Gaza Cola” and “Palestine Cola” ³⁷ indicates a market shift where consumers are actively seeking ethical alternatives, threatening the long-term viability of the brand in Muslim-majority markets.

10.3. Supply Chain Security

Reliance on CBC for logistics in the region introduces “Conflict Risk.” Facilities in Atarot and operations in the Golan Heights are located in active conflict zones. The reliance on settlement infrastructure (which is a target for resistance activities) creates a fragile supply chain.

11. Conclusion and Recommendations

11.1. Summary of Audit

The forensic audit concludes that Costa Coffee is inextricably linked to the military and settlement apparatus of Israel through its parentage and franchise structure.

• Material Support: Its sister companies (under CBC) provide food and hydration to the military and operate permanent logistics hubs on occupied land.
• Ideological Support: The corporate structure has funneled cash to political extremists who advocate for the immunity of soldiers and the denial of Palestinian history.
• Structural Integration: The entity is not a neutral observer; it is a monopoly player that enforces its market dominance to sustain operations in illegal settlements.

11.2. Strategic Recommendations for Defense Logistics

1. Risk Designation: Classify Costa Coffee and The Coca-Cola Company as “High Reputational Risk” vendors due to active operations in illegal settlements (Atarot).
2. Procurement Policy: Defense logistics procurement should favor suppliers with clear “No Settlement” policies to ensure compliance with International Humanitarian Law.
3. Audit Demand: A requirement for TCCC to provide a transparency report detailing the exact revenue generated from the Atarot facility and the timeline for its closure.

This report provides the necessary data to justify a Moderate-High complicity ranking for the corporate entity, distinct from the lower ranking of the consumer product itself.

End of Report

Appendix A: Detailed Subsidiary Breakdown

• Tara Dairy:
  • Function: Dairy production.
  • Complicity: Institutional supply to IDF; ownership of Meshek Zuriel (Jordan Valley settlement farm).
• Meshek Zuriel:
  • Function: Goat cheese/dairy farming.
  • Complicity: Primary farm located in Shadmot Mehola (Occupied Jordan Valley).
• Tabor Winery:
  • Function: Wine production.
  • Complicity: Sourcing grapes from vineyards in Area C (West Bank) and Golan Heights.
• Neviot:
  • Function: Mineral water.
  • Complicity: Integrated into CBC logistics; historic extraction concerns (though some operations moved).
• Prigat:
  • Function: Juices.
  • Complicity: Standard institutional supply to IDF canteens.

Appendix B: The “Im Tirtzu” Connection – Timeline

• 2015: CBC donates 50,000 NIS to Im Tirtzu.
• 2015: Donation revealed by Israel Corporations Authority despite request for confidentiality.
• Context: Im Tirtzu launches “Moles” campaign against human rights activists.
• Implication: Corporate funding of political intimidation tactics.

Appendix C: Geospatial Data – Atarot

• Coordinates: 31.86°N 35.22°E (Approximate).
• Status: Industrial Zone in Area C / East Jerusalem (Annexed de facto, occupied de jure).
• Tenant: The Central Company for Sales and Distribution (CBC Subsidiary).
• Function: Regional Distribution Center (Jerusalem/West Bank).

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