The Guardian

Baghdad, July 7:

Coca-Cola has returned to Iraq after an absence of nearly four decades, triggering a cola war in a lucrative but potentially hostile market. Coke ended its 37-year exile last week by setting up a joint-venture bottling company to compete with Pepsi for 26 million consumers. The upsides for Coke include a thirst-inducing climate and burgeoning Islamic conservatism which has banned beer and other alcoholic drinks in much of the country. The downsides, besides Pepsi’s head start, are a raging insurgency and banditry which threaten supply routes, and a perception that Coca-Cola is linked to Israel and ‘American Zionists’. Coke withdrew from Iraq in 1968 when the Arab League declared a boycott because of business ties to Israel, leaving Pepsi to dominate the Middle East market for soft drinks. The boycott ended in 1991, but sanctions and wars kept Coke out of Iraq.