Thought to Be Just a Military Force, but Now Controls 40% of Iran’s Economy... IRGC Even Moves Into Cola Business [Company IRGC]①

IRGC's Reach Extends to the Well-Known Middle Eastern Brand 'ZamZam Cola'

170,000 Employees Under IRGC... Commanding 40% of Iran's Economy

Editor's NoteAmid the ongoing war between the United States and Iran, attention is focused on the Islamic Revolutionary Guard Corps (IRGC), which has emerged as a central pillar of the Iranian regime. The IRGC is officially a military organization responsible for national defense alongside the Iranian armed forces. However, in reality, it can be described as a conglomerate that controls more than 40% of Iran's economy. Behind its sprawling expansion was the unwavering support of the late Supreme Leader Ayatollah Seyyed Ali Khamenei. Now, after his death in a U.S. airstrike this past February, the IRGC has transformed into an independent entity that even the Iranian government cannot control. The Asia Business Daily has investigated the true nature of the IRGC and examined how it may influence future negotiations with the United States.

Iran Jamjamcola Homepage

Externally, the Islamic Revolutionary Guard Corps (IRGC) is widely known as a military organization operating alongside the Iranian armed forces. However, it is also referred to as a massive holding company with hundreds of subsidiaries. From beverage businesses such as the famous Middle Eastern soda brand ZamZam Cola, to construction, telecommunications, and manufacturing, the IRGC dominates over 40% of Iran's economy. Recently, it has been reported that the double blockade of the Strait of Hormuz, caused by U.S. maritime restrictions, has led to a sharp decline in the revenues of its subsidiaries, raising concerns about public discontent resulting from large-scale restructuring.

IRGC Controls Even the Famous Middle Eastern Brand ‘ZamZam Cola’

Cola production scene at Jamjam Cola factory. Captured from Iran's state-run Press TV.

According to Iranian news agency Mehr News Agency (MNA), the Iranian government announced last month that it would begin controlling the production and export of carbonated beverages and place all production plants of ZamZam Cola, Iran's largest carbonated drink manufacturer, under the umbrella of Sina Food Industries Holding.

Sina Food Industries Holding is the largest food sector holding company in Iran and is owned by Sina Bank, a major funding source for the IRGC and one of the Iranian entities under international sanctions. With this move, all 17 ZamZam Cola production plants in Iran have come under the control of the IRGC. This measure is interpreted as an attempt to control the production and distribution of colas and carbonated drinks, which have become strategic materials in the ongoing war with the United States.

ZamZam Cola is a homegrown Iranian carbonated beverage brand that enjoys widespread popularity not only in Iran but also throughout the Middle East, including Saudi Arabia, Iraq, Oman, and Qatar. It was initially established in 1954 under the Pahlavi dynasty as a subsidiary of U.S. Pepsi-Cola in Iran. After the 1979 Islamic Revolution, Pepsi withdrew and the brand was nationalized. Until the imposition of U.S. sanctions against Iran in 2018, ZamZam Cola was considered one of Iran's three major cola brands alongside Coca-Cola and Pepsi.

Subsequently, ZamZam Cola increased production by collaborating with other private beverage factories as partners, and its domestic market share in Iran reached as high as 50%. Before the U.S. sanctions were imposed, ZamZam Cola was exported not only to the Middle East but also to Europe and North America.

More Than 800 IRGC-Affiliated Companies... “Controls Over 40% of Iran’s Economy”

While the IRGC is widely recognized externally as a military organization under the command of Iran’s Supreme Leader, in reality, it is considered one of the largest conglomerates in the Middle East. The IRGC owns major companies in key sectors of Iran’s economy—such as construction, manufacturing, and petrochemicals—controlling more than 40% of the nation’s economic activity.

According to the BBC, the IRGC dominates the Iranian economy through Khatam al-Anbiya Construction Group (KCB), known as one of the largest holding companies in the Middle East. KCB owns four major intermediate holding companies: Karbala, which operates in road and oil pipeline construction; Qaem, specializing in dams and power plants; Kowsar, which manufactures automobiles and airplanes; and Nuh, focused on petrochemical facility construction.

Through these subsidiaries, KCB controls more than 800 companies, with total revenues reportedly amounting to 40% of Iran’s gross domestic product (GDP). These companies collectively employ about 170,000 people—nearly matching the IRGC’s entire military force of 180,000, according to the BBC.

There has also been criticism within Iran about the IRGC’s excessive control over the economy. In June 2017, then-President Hassan Rouhani, a moderate reformist, criticized, “The IRGC is a government with guns,” and added, “The IRGC uses its political influence to secure all project contracts, and no one dares compete with them.”

Prolonged U.S. Maritime Blockade Intensifies Economic Pressure... “Concerns Over Corporate Restructuring”

Reuters Yonhap News

It is reported that the IRGC and the Iranian government are struggling with job losses as restructuring intensifies among their affiliated companies due to the prolonged U.S. maritime blockade. On May 11 (local time), Iran’s Tasnim News Agency quoted Iranian official Gholamhossein Mohammadi as saying, “Since the recent war, one million jobs have been lost, and up to two million people have become either directly or indirectly unemployed.” The Industrial Adjustment Committee of Iran also warned that “up to 3.5 million workers could be affected.”

The U.S. maritime blockade has caused a sharp drop in oil export revenues, which previously amounted to $500 million (about 744 billion won) per day, while disruptions in raw material imports and product exports have forced companies to halt production. According to The New York Times (NYT), a major textile factory in western Iran has laid off 700 of its 800 employees, and large-scale restructuring is also underway in the northern industrial region.

Iran’s new leader Mojtaba Khamenei also urged companies to “refrain from layoffs as much as possible” in a statement issued on May 1, Labor and Teachers’ Day. In March, in response to worker discontent, the minimum wage was raised by 60%; however, NYT noted that the increased labor costs have only accelerated layoffs.

This content was produced with the assistance of AI translation services.