VZCZCXRO5550
RR RUEHDE RUEHDIR
DE RUEHRH #0233/01 0380957
ZNR UUUUU ZZH
R 070957Z FEB 09 ZDK
FM AMEMBASSY RIYADH
TO RUEHC/SECSTATE WASHDC 0061
INFO RUEHZM/GCC COLLECTIVE

UNCLAS SECTION 01 OF 03 RIYADH 000233 
 
SENSITIVE 
 
SIPDIS 
 
DEPT FOR NEA/ARP(HARRIS) 
 
E.O. 12958: N/A 
TAGS: ECON SOCI SA
SUBJECT: Little hope for quick relief from the great tonic water 
drought of 2008-09 
 
RIYADH 00000233  001.2 OF 003 
 
 
SENSITIVE BUT UNCLASSIFIED -- NOT FOR INTERNET DISTRIBUTION 
 
Summary 
------- 
 
¶1. (SBU) The shelves of Saudi groceries stores normally are as 
blessed with food as the country's land is blessed with prodigious 
oil reserves, so emboffs took note several months ago when tonic 
water began to disappear from stores, homes, and restaurants. 
Initially Western expats assumed tonic was not available because of 
its association with alcohol.  Rumors of possible causes for the 
shortage swirled through diplomatic and expat dinner party circuits 
over the past 3-4 months, with wild guesses much more plentiful than 
facts.  However, we recently learned that the local Coca-Cola 
distributor may be responsible for disrupting the traditional supply 
lines in an attempt to reclaim the market from one or more foreign 
bottling companies that previously supplied the market.  End 
summary. 
 
¶2. (SBU) There has been widespread speculation among thirsty 
expatriates that the Wahhabi killjoys from the Committee for the 
Promotion of Virtue and Prevention of Vice (aka CPVPV, aka 
Mutawa'in, aka religious police) have been to blame for the 
four-month tonic shortage, or else perhaps their coconspirators in 
the ever-vigilant Saudi customs service.  Nevertheless, as 
increasingly precious personal stocks of tonic water in the Kingdom 
diminished, econoff conducted extensive research to uncover the true 
story, outlined below. 
 
Blame cast on Mutawa'in initially 
--------------------------------- 
 
¶3. (SBU) When tonic water stocks began to run out around four months 
ago local consumers, analysts, and restauranteurs told econoff they 
expected the shortage to be temporary.  But as the tonic drought 
stretched from days, to weeks, to more than a month, fear grew that 
the CPVPV and/or Saudi Customs was responsible.  The Kingdom has a 
notorious history of intrusive customs inspections and of capricious 
seizures of goods deemed un-Islamic in the broadest sense.  Although 
those days seem to have passed, problems remain.  For example one 
embassy contact who imports children's birthday paraphernalia (paper 
plates and cups with princess/superhero imagery) said that she often 
has major problems importing her products. 
 
¶4. (SBU) (Note:  The real reason this contact has such trouble is 
that the most conservative Saudis oppose the celebration of 
birthdays as un-Islamic; however, the reasons Customs officers cite 
are typically more specific and bizarre.  She said that during her 
efforts to gain the release of her most recent shipment from 
customs, she was told that Barbie (pictured on cups she hoped to 
sell) was a Zionist figure, while pictures of Spiderman on paper 
plates shooting webs really symbolized a crypto-Christian sign of 
benediction.  End note.) 
 
Focus shifts to Schweppes 
------------------------- 
 
¶5. (SBU) Soon, however, reports emerged that the Mutawa'in and 
customs were not to blame.  As Riyadh's scorching summer cooled into 
its torrid autumn, thirst grew, and a longtime economic section 
contact said the American Business Group of Riyadh (ABGR) steering 
committee had formed a special committee to look into what was then 
termed "the tonic problem."  After some research, the special 
committee reportedly was informed that a shipment would be received 
"in a few weeks."  Needless to say, this did not occur. 
 
¶6. (SBU) The special committee reported to the ABGR steering 
committee that although tonic water is mainly consumed with alcohol, 
the Saudi government allows it to be imported without restriction. 
However, contacts say the Kingdom's market for tonic is relatively 
small, so it is not produced locally but is imported by a Coca-Cola 
franchise in a nearby country (NFI).  Several contacts cited an 
estimate that Saudi Arabia has been importing around 40,000 
cases/year.  Rumors swirled in late 2008 that the shortage was due 
to the fact that "bills had not been paid, so Schweppes cut them 
off." 
 
¶7. (SBU) After the special ABGR committee was dissolved, it emerged 
that the long-awaited tonic shipment actually contained soda water, 
not tonic.  (Note:  Some claim there also was a very brief shortage 
of Soda water, a fact emboffs did not observe and have not been able 
to confirm.  End note.)  And a strange new lemon-flavored sweet 
carbonated canned beverage began to appear on store shelves in 
Schweppes cans.  It appeared to be a local product designed as a 
stopgap to fill tonic-bereft cups and glasses -- but tasted 
horrible.  Unfortunately, experimentation has not yet resulted in 
any cocktails acceptable to Western palates using this poor 
substitute as a mixer. 
 
RIYADH 00000233  002 OF 003 
 
 
 
¶8. (SBU) Expatriates have begun quietly importing tonic water 
themselves, mainly from Bahrain in personal vehicles.  Unlike 
bootlegging, which also occurs, these amateur importers say they 
have had no problems with Saudi customs when importing tonic in 
small/medium quantities.  One Western embassy recently brought in 15 
cases from Bahrain without difficulty; however, sources agree this 
is not an economical or sustainable alternative to a return of tonic 
water to area store shelves.  Private sector Western expatriates in 
Saudi Arabia have for decades dabbled in discreet moonshining, 
sometimes with superb results; a how-to guide, "The Blue Flame," 
reportedly once passed around on Aramco's compounds, is even today 
read avidly online by Westerners in the Kingdom. 
 
¶9. (SBU) With no end to the shortage in sight, consumers have begun 
researching how to make tonic water themselves.  According to the 
Embassy health unit, quinine sulfate once was widely available in 
Saudi pharmacies but after the U.S. FDA issued a warning in 2007, 
the Saudi government removed the extract from the shelves, and now 
only a small quantity remains in the country at the King Faisal 
Specialist Hospital and Research Centre -- the country's premiere 
hospital, providing specialized care to Saudi Royals, miscellaneous 
VIPs, and occasional tertiary referrals from other hospitals of 
patients requiring specialized care.  Unlike many medicines in the 
Kingdom, that supply is available only with a prescription.  There 
have been rumors about Cinchona trees (Quinine comes from its bark) 
in the Riyadh area, which also would be a possible source of 
homemade tonic water. 
 
Local bottling company exec 
says company HQ responsible 
--------------------------- 
 
¶10. (SBU) After several months of fruitless searching for Cinchona 
trees on Riyadh's diplomatic quarter, econoff met an executive of 
the Olayan Group, a large Saudi-based conglomerate that owns the 
Coca Cola bottling company of Saudi Arabia (CCBCSA) on February 3. 
The Executive indicated that CCBCSA has proposed making tonic water 
in Saudi Arabia, and the proposal is under consideration by the 
Coca-Cola parent company, outside the Kingdom. 
 
¶11. (SBU) He described how the business model Coca-Cola uses around 
the world is to let bottling companies in a given country produce 
the canned and bottled drinks to be sold in that sales territory, so 
it had been exceptional that tonic water in Saudi Arabia was 
imported, while other Coca-Cola products were produced and bottled 
locally.  He indicated, however, that the headquarters' decision on 
the proposal still was sometime away (i.e., months, not weeks), and 
no tonic water would be imported until the issue was resolved. 
Econoff expressed disappointment and asked if CCBCSA was worried 
that they would not be able to get a permit from Saudi authorities 
to produce the tonic locally since under the "not in my back yard" 
principle, it was reasonable to expect that the Saudi government 
might be more willing to allow tonic imports than domestic 
production.  The executive emphasized that CCBCSA was confident it 
would not be a problem. 
 
¶12. (SBU) According to its website, Olayan is in joint ventures 
with, or otherwise represents the interests of, many major 
international companies, including Xerox, Toshiba, and Burger King. 
As for CCBCSA, the company employs 2,000 people and operates three 
factories in Dammam, Jeddah, and Riyadh, in addition to 30 sales 
depots. 
 
Comment 
------- 
 
¶13. (SBU) Emboffs' bet had been that the Mutawa'in was responsible 
for the tonic shortage.  Apparently the price of bootleg alcohol in 
the Kingdom has risen sharply in the past 6 to 12 months, and a 
bottle of Johnnie Walker Black Label now sells for more than $800 on 
the black market.  We interpreted the shortage of the former and the 
high price of the latter as evidence that the Saudi government 
quietly was cracking down on alcohol smuggling, perhaps aided by the 
country's x-ray scanners used to search shipping containers quickly 
and effectively for explosives, illegal immigrants, and illicit 
liquids. 
 
¶14. (SBU) The Olayan executive's pessimism about the chances of 
tonic water returning to Saudi Arabia any time soon is disheartening 
to tonic enthusiasts at this and other embassies, but we were 
pleasantly surprised to learn that the shortage was not due to 
interference from the religious police or over-zealous customs 
officers.  The path of modernization in the Kingdom has been winding 
and not always leading in a forward direction; however the country 
has progressed extremely rapidly considering where its populace was 
socio-economically 75 (or for that matter, 20) years ago.  For 
example, Coca-Cola was unavailable in Saudi Arabia for many years 
 
RIYADH 00000233  003 OF 003 
 
 
because of the Arab League boycott of Israel and only was 
reintroduced (by Olayan) in 1988.  Nevertheless, the Saudi 
government appears serious about implementing its WTO obligations 
and opening further to the outside world.  The Saudi investment 
promotion agency SAGIA remains influential and committed to its 
10x10 plan of making the country nominally one of the world's ten 
most competitive countries by 2010. 
 
¶15. (SBU) Meanwhile, emboffs' remaining tonic water supplies are 
shrinking each day, and now it is the tonic that is locked away 
before a party instead of the fine china or DVD collection.  End 
comment. 
 
FRAKER