McDonald’s in Israeli Right’s Crosshairs Over Absence of West Bank Outlets

Citing anti-boycott law, group seeks to bar burger chain from lucrative Ben-Gurion Airport contract and warns other businesses may be targeted

A McDonald's location in Tiberius, Israel.
Gil Eliahu

Outside of McDonald’s restaurants in Tel Aviv signs have been posted declaring them “Area M – An area controlled by a company that boycotts parts of the State of Israel. Entry is tantamount to supporting it.”

The signs, which echo the division of the West Bank into Areas A, B and C, according to the degree of Palestinian responsibility, are part of a campaign now being mounted against McDonald’s Israel as it gets ready to bid to operate restaurants in Ben-Gurion International Airport.

>> Read more: Thanks McDonald's for reminding Israel there is a Green Line, and even a red line | Opinion

McDonald’s has been operating in Israel since 1992 but it doesn’t have a single restaurant over the Green Line. The franchise holder, Omri Padan, was among the founders of the leftist Peace Now organization and in 2013 declared he would not open a restaurant in a new mall that had opened in the West Bank city of Ariel.

Behind the campaign is a shadowy group called the Forum of Disabled IDF Veterans for Israel’s Security. But the call for barring McDonald’s Israel has also won the support of Economy and Industry Minister Eli Cohen and Likud Knesset Member Michal Shir.

At issue is an unusually lucrative contract that any restaurant chain would be glad to have. Burger Ranch, a local hamburger chain that has the contract now, sees about 40 million shekels ($11.2 million) of annual turnover from three restaurants it operates at the airport – equal to a quarter of the 64-branch chain’s total.

But the campaign also represents a potential threat to Israeli retailers and other businesses that have sought to avoid getting entangled in the politics of West Bank settlements. Right-wing activists have until now focused their efforts on ensuring exports from the West Bank are labeled “Made in Israel,” but they have not pressured local businesses to open up stores or other operations in the settlements.

That may be changing, especially amid a mounting campaign to annex all or part of the West Bank.

“The chains don’t want to enter into the mine field of doing business in the [occupied] territories because of the boycott threat that could ensue,” said Nir Shmol, CEO of Snir, which advises retailers on strategy. “What has helped them is that until now no big regional mall has been built in the territories – because it would be hard to refuse to locate in one.”

The only large malls are ones operated by the Ofer Group in Ma’aleh Adumin and by Rami Levy in Atarot. “They’re relatively big malls, but they aren’t appropriate for the big apparel chains, which need tens of thousands of square meters,” said Shmuel.

Israeli businesses face the risk of being targeted by the global boycott, investment and sanctions (BDS) movement or other pro-Palestinian groups if they are seen doing business in the West Bank.

The organization leading the campaign against McDonald’s Israel isn’t registered as a non-profit organization or public benefit corporation, so there is almost no publicly available information on it.

Sources said the group counts a few score activists, all of whom are disabled Israel Defense Forces veterans. But the forum doesn’t deal with issues of the disabled, while it does cooperate with bigger and better-known rightist groups such as Im Tirtzu and Ad Kan!

The campaign the forum is running, whose funding is not known, is being managed by a public relations firm called Rosenbaum Communications.

The forum has no affiliation with the IDF Disabled Veterans Organization, the nationwide nonprofit that serves over 50,000 people.

“The forum’s campaign doesn’t represent IDF disabled,” said Momo Elnekave, the latter organization’s chairman. “Omri Padan every year donates tens of thousands of food coupons to the needy. He is a valuable man who keeps his restaurants at a high standard and has adopted electronic innovations that benefit the disabled customers. No one should harm such a person.”

He was referring McDonald’s Israel’s provision of full access to blind and visually-impaired customers by installing a voice navigation app enabling them to get around the restaurant safely.

The forum says that Israel’s anti-boycott regulations authorize the finance minister to deny tax benefits and/or the right to bid on government contracts to any business that openly declares it supports a boycott of Israel, or of areas under its control, i.e. the West Bank. It also cites a law barring discrimination against people based on where they live.

The organization doesn’t intend to stop with McDonald’s. “We want every company that isn’t interested in opening branches over the Green Line to be prevented from competing on these tenders. We’ll reach everyone,” it says.

Burger Ranch, which is submitting a bid to keep its operations at Ben-Gurion, only opened its first restaurant over the Green Line in 2013. Burgerim, another local chain that hasn’t decided whether to submit a bid, has a single branch in Ma’aleh Adumin.

Burger King has no West Bank branches, which it says is a business decision, adding that it has no policy about outlets over the Green Line. The international chain only returned to Israel in 2016 after a six-year absence and counts only 11 restaurants throughout the country

For his part, Padan says his franchise agreement only applies to Israel itself, not to the occupied territories.

Retailers who spoke with TheMarker were careful to avoid saying they had any policy regarding stores over the Green Line. H&M, the Swedish-based apparel chain, said it was still expanding in Israel and didn’t have the resources to expand into the territories.

Fox Group, a big Israel retailer, has stores in the settlements under its own name and the Laline brand, as well as under the international Children’s Place brand. But its chain of Nike-branded stores does not. The company attributed this to Nike’s global policy of only operating stores in big malls.

The Israeli chain Castro has an outlet in Ma’alen Adumim and said it would consider others over the Green Line if demand warranted it.