Ahava

Ahava Dead Sea Laboratories, Limited

Type	Private
Industry	Cosmetics
Founded	1988 (1988)
Headquarters	Holon, Israel
Products	Skin care
Revenue	$150 million
Owner	Fosun International
Number of employees	200
Website	http://www.ahava.com/

Ahava factory

Ahava Dead Sea Laboratories, Limited (Hebrew: אהבה‎, Love) is an Israeli cosmetics company with headquarters in Lod^[1] that manufactures skin care products made of mud and mineral-based compounds from the Dead Sea. The company has flagship stores in Israel, Germany, Hungary, South Korea, the Philippines and Singapore.^[2] As of 2015, Ahava income was more than US$150 million a year.^[3] Ahava products have caused controversy, as critics say the company uses natural resources of occupied Palestinian territory,^[4] and that the products are incorrectly labeled as made in Israel.^[5]^[6] In 2015 the Chinese investment firm Fosun International agreed to purchase a controlling share of the company, which has been valuated to ca. NIS 300 million ($77 million USD).^[7]

The company's administrative headquarters are currently located in Holon, while the main manufacturing plant and showroom are in Mitzpe Shalem,^{[a 1]} an Israeli settlement and kibbutz located on the Dead Sea in the West Bank.^[8]^[9] However, as of 2016, they are vacating their Mitzpe Shalem factory in the West Bank and building a new factory on land leased by Kibbutz Ein Gedi, in Israel.^[10]

History

Ziva Gilad, a spa technician, came up with the idea of marketing Dead Sea mud after watching women tourists scooping up the mud to take home.^[11] Ahava was founded in 1988 as a single stand selling bottles of body scrub to tourists, generating $1 million that year.^[12]

As of 2010, Ahava is the only cosmetics company licensed by the Israeli government to mine raw materials at the Dead Sea.^[11] On the Jordanian side of the Dead Sea, there are approximately fifty small companies producing cosmetics, but only 15 have a global presence. Israel has imported raw materials for its Dead Sea mud cosmetics from Jordan since 1994.^[3]

In 2009 Ahava took on new shareholder Shamrock Holdings, the Walt Disney Family's investment arm, which purchased 20% of Ahava Dead Sea Laboratories from its existing shareholders^[13]^[14] The company has 200 employees, 180 of them in Israel.^[14]

Models wearing and distributing Ahava products at New York Fashion Week in 2009

In 2009, the company reported sales of nearly $150 million a year. In the United States, the largest overseas market for Ahava products, the company signed distribution deals with Lord & Taylor, Nordstrom and the beauty-supply chain Ulta.^[11]

In 2011, Elana Drell Szyfer, former Senior Vice President of Global Marketing for Estee Lauder, was appointed general manager of Ahava North America.^[15] In 2013, Szyfer left to work for Kenneth Cole Productions.^[16]

As of 2011, Ahava's shareholders included Hamashbir Holdings, Gaon Holdings, Kibbutz Ein Gedi, Kibbutz Mitzpe Shalem and Kibbutz Kalya. Of these kibbutzim, Mitzpe Shalem and Kalya are located north of the Green Line, in the West Bank.^[17] As of 2015, Ahava is controlled by Gaon Holdings, the Livnat family and Shamrock Holdings who together own 53% of the company; Kibbutz Mitzpeh Shalem holds 35%, Kibbutz Kalia 5.8%, and a group of local kibbutzim another 6.7%.^[7]

In 2015 the Chinese investment firm Fosun International agreed to purchase a controlling share of the company, which as a whole has been valuated to ca. NIS 300 million (USD 77 million).^[7]

In March 2016, under its new ownership, it was reported that AHAVA is moving its factory at Kibbutz Mitzpe Shalem to the Tamar Regional Council in order to avoid the EU directives against trade with companies operating in illegal settlements and pressure from the international BDS movement. ^[18] However, the statement released by Ahava mentions only the opening of an additional facility at Ein Gedi, not to the closure of the existing plan at Ein Gedi. ^[19]

Products

Ahava product lines include a basic product for all skin types; other products for dry, sensitive skin and for men’s skin; and anti-aging products for face and body.^[20] Product lines include hand cream, foot cream, facial cleanser, body milk, facial nourishing cream, facial moisturizer, moisturizing shower cream and body cream.^[21] Some products claim to use citrus and citrus products as a source of vitamins and minerals.^[20]

Dead Sea mud, alone or in combination with other ingredients, is believed to have benefits for deep cleansing and stimulation of the skin. Minerals extracted from Dead Sea water such as calcium, magnesium and potassium, are said to improve the metabolism, stimulate circulation and aid in the natural repair of cells.^[22] In 2009, Ahava Dermud range of skincare products has been shown to have protective, anti-oxidant and anti-inflammatory properties that can antagonize biological effects of UVB radiation on skin, reducing skin photodamage and photoaging, and reducing oxidative stress and inflammation in skin pathologies.^[23]

Therapy with mud packs for conditions such as osteoarthritis is relatively expensive and requires the assistance of a therapist and a treatment room. In the wake of these limitations, Ahava developed mud compresses used in the home which are heated in a microwave oven or a pot of hot water and placed over painful joints. A clinical research by the Ben Gurion University of the Negev, supported in part by a grant from "Ahava", has concluded that the group treated with natural mud compresses had a reduction of 20% or more in Knee Osteoarthritis pain scores at treatment completion, at one month, and at three months, compared to the control group.^[24]

Embracing the trend toward more natural ingredients in cosmetics, Ahava purifies its own water and, according to the company, employs minimally invasive techniques to harvest mud and minerals. Ingredients are not tested on animals and Ahava products are packaged in recyclable containers.^[11]

Scientific research

Ahava is one of several Israeli cosmetics companies researching nanotechnology applications. The company has established an R&D program to research nanoemulsion and nanosuspension with mud nanoparticles.^[22]

Ahava operates its own laboratory for cell and organ culture. It is the coordinator of SkinTreat (FP-7) and a partner in nanoReTox (FP-7) founded by Cellage, a European research consortium the specializes in skin cellular Ageing (FP-5).^[25] Ahava developed a laboratory model for in-vitro NP screening that is employed for studying inflammatory processes using UV- irradiated human skin organ cultures.^[25]

Controversy

There is a controversy about whether Ahava is in breach of international law, due to the location of the factory on the West Bank section of the Dead Sea shore, and to the fact that although it only buys mud from the Israeli section of the Dead Sea and from Jordan, it is also licensed to extract mud from the West Bank section.

Ahava's factory itself is located in the occupied West Bank, triggering global protests.^[26] The company buys mud, an essential raw material for its products, only from the Dead Sea Works, a company found entirely within the internationally recognized borders of Israel, within the pre-1967 "Green Line". However, Ahava is also licensed to extract mud from the West Bank section of the Dead Sea coast.^[27] According to human rights organization B'Tselem, several Israeli commercial ventures in the West Bank, including Ahava, breach the Hague Convention on the Law and Customs of War on Land, which prohibits exploitation of resources in occupied territory.^[28]

Code Pink staging a protest against Ahava in Los Angeles in 2009

Boycott campaigns have been organized by organizations such as Code Pink, which says that Ahava's products come from "stolen Palestinian natural resources in the occupied territory of the Palestinian West Bank", and are produced in Mitzpe Shalem.^[4] In response, the company stated that Kibbutz Mitzpe Shalem, where the products are produced, is not an illegal settlement, and that the mud and materials used in Ahava cosmetics products are mined in the Israeli part of the Dead Sea.^[29]

In September, 2011, South African Industry Minister Rob Davies agreed in principle that goods manufactured in the occupied territories should not be labelled as a product of Israel since that is misleading. Davies said: "We're persuaded it's in the interest of South African consumers to know whether their products are coming from Israel or from the occupied territories." ^[5] The new South African rules will ensure that such products, such as Ahava, are labeled "product of illegal settlement in the Occupied Palestinian Territories" before they can be sold in South Africa.^[30]

Prior to this, South African activists had submitted an affidavit to the South African Police Service accusing retailer, Wellness Warehouse, and local Ahava importer, SDV Pharmaceuticals, of violating South African trade law by selling Ahava products carrying false labels of origin.^[31]

In May 2012, South Africa’s Minister of Trade and Industry announced new labeling rules for Israeli settlement goods;^[6] Ahava was mentioned by name as a company whose goods were fraudulently labeled as “Product of Israel” when their place of origin is the occupied Palestinian Territories.

Ahava's store in a fashionable street of London's West End closed in September 2011 after constant protests by anti-Israeli activists. Owners of the surrounding stores complained to the landlord Shaftesbury plc that the repeated protests were affecting their business. A pro-Israeli group also held fortnightly counter-demonstrations, which attracted renewed controversy when members of the far-right English Defence League turned up, unasked, and joined in the demonstrations in support of Ahava.^[32]^[33]

In 2012, the British Natural History Museum was denounced in a letter signed by a group of 21 prominent academics and cultural figures for participating in a joint European Union-funded research programme with Ahava. The signatories said that "[Ahava-DSL] extracts, processes and exports Palestinian resources to generate profits that fund an illegal settlement. Israel's settlement project has been held... to break international law. Organisations which aid and abet this process may well themselves be found to be in violation." The museum said Ahava-DSL was chosen from a list approved by the European Commission and they "would not participate in any academic or educational boycotts that could restrict academic freedom".^[34]

As part of the economic agreement between Israel and the European Union, Israel cannot label products made in the West Bank as "made in Israel"; products made in the West Bank are subject to higher tariffs compared to products made in Israel.^[35] In November 2009, Dutch MP Van Bommel (Socialist Party) asked Dutch FM Verhagen (CDA) whether or not Ahava products that were marketed at the time in the Netherlands originated from the Palestinian Territories. If so, Ahava would not be entitled to a tax-exemption at Dutch customs.^[36] Verhagen promised to launch an investigation through the Dutch customs authority.^[37] In February 2010, the state-secretary of Economic Affairs Heemskerk responded to Van Bommel through a letter to the Dutch Parliament, saying records for the years 2007–2009 indicated that Dutch customs had not given tax-exemption to Ahava products.^[36]