American brands find way to Iran

16 September 2012 | 22:47 Code : 1906901 Latest Headlines

Even after decades of diplomatic estrangement and tightening economic sanctions, American products manage to find their way into the Iranian marketplace. The routes are varied: back-channel exporters, licensing workarounds and straightforward trade for goods not covered by the U.S. embargoes over Iran's nuclear program.

It offers lessons in the immense difficulties facing Western attempts to isolate Iran's economy, which has deepening trade links with Asia where distributors serve as middlemen to funnel U.S. and other goods to Iranian merchants. But sanctions are also battering Iran's currency and driving up costs for all imports, which could increase domestic pressures on Iran's ruling system.

Although the number of made-in-America items in Iran is dwarfed by the exports from Europe, China and neighboring Turkey, some of the best-known U.S. brands can be tracked down in Tehran and other large cities. It's possible to check your e-mails on an iPhone, sip a Coke and hit the gym in a pair of Nikes.

"I'm always looking for what new Apple products are in the windows," said Kamyar Niaki, a 19-year-old freshman at Tehran's Azad University, as he played "Angry Birds" on his iPhone 4S -- about $800 in Iran -- at a northern Tehran shopping mall popular with young people for its selection of computers, mobile phones, software and apps.

The iPhones and other Apple products typically enter Iran through networks in Dubai or from Asian distributors, which also ship everything from lower-cost MacBook fakes to bogus Levi's and Tommy Hilfiger.

Similar trade routes from the Far East or nearby Dubai also bring in Westinghouse appliances and Microsoft programs. And they were probably also responsible for the Epiphone model guitar by Nashville-based Gibson that Ali Mahmoudi bought for his oldest son last week for about $1,200 -- more than double the price in the U.S.

"My son learned from his classmates in high school that American guitars are still the best," said Mahmoudi, an engineer.

Middle-aged Iranians have memories of a time when stores were awash with U.S. products and the Cadillac was the gold standard on the roads, which still have some Detroit behemoths from the 1970s weaving through Tehran's relentless traffic.

The U.S. became vilified as the Great Satan after the 1979 Islamic Revolution, and chants of "Death to America" remain a staple at Friday prayers at Tehran University. But even Iran's leadership could not stamp out the taste for Coke and Pepsi.

Both iconic American drinks have been mainstays for years in one of the Middle East's largest consumer markets with 75 million people. The U.S. Treasury sanctions on Iran give some leeway for food and beverages, allowing the Coca-Cola and PepsiCo to work through non-U.S. subsidiaries to ship their syrup to Iranian bottlers and distributors.

It's brought some backlash from hard-liners who cringe at the popularity of Coke and Pepsi at the expense of local rival Zamzam Cola, named after a venerated well in the Islamic holy city of Mecca. Zamzam is owned by a government-backed foundation. Yet in the cola wars, Iran is struggling.

Reza Kazemi, a worker at a government-owned Tehran hospital, carried a family-size Coke -- 1.5 liters at the equivalent of 50 cents -- among his groceries from a shop in downtown Tehran.

The same shop stocks Gillette razors and Pampers diapers, both made by Procter & Gamble, whose health care products are not blocked by sanctions.

tags: u.s. iran's iran products -- coke tehran

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