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 conflict between the United States and Iran, the Islamic Revolutionary Guard Corps (IRGC) has emerged as a central force within the Iranian regime, attracting significant attention. Officially, the IRGC is a military organization responsible for the defense of Iran alongside the regular armed forces. However, in reality, it operates as a conglomerate controlling over 40% of the Iranian economy. This sprawling expansion was made possible by the unwavering support of former Supreme Leader Ayatollah Seyyed Ali Khamenei. Now, following his death in a U.S. airstrike in February, the IRGC has transformed into an independent organization beyond even the Iranian government's control. The Asia Business Daily has examined the true nature of the IRGC and considered how it may affect future negotiations with the United States.

Iran Jamjamcola Homepage

Externally, the Islamic Revolutionary Guard Corps (IRGC) is widely recognized as a military organization alongside the Iranian armed forces, but it is also referred to as a massive holding company with hundreds of subsidiaries under its control. The organization dominates more than 40% of Iran's economy, with business interests ranging from beverage companies such as the prominent Middle Eastern brand ZamZam Cola, to construction, telecommunications, and manufacturing. Recently, due to the double blockade of the Strait of Hormuz imposed by U.S. maritime sanctions, the subsidiaries have seen a sharp decline in revenue, raising concerns over large-scale restructuring and the resulting public discontent.

IRGC Takes Control of the Major Middle Eastern Brand 'ZamZam Cola'

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

According to Mehr News Agency (MNA), an Iranian media outlet, the Iranian government announced last month that it would begin regulating the production and export of carbonated beverages and incorporate all factories of ZamZam Cola, the country's largest producer of carbonated drinks, under the umbrella of Sina Food Industries Holding.

Sina Food Industries Holding is Iran's largest food sector holding company, owned by Sina Bank, which is a source of funding for the IRGC and one of the Iranian entities under international sanctions. With this measure, all 17 ZamZam Cola production facilities in Iran have come under IRGC control. This move is seen as a means to control the production and distribution of cola and other carbonated beverages, which have become strategically important commodities in the ongoing conflict with the United States.

ZamZam Cola is a homegrown Iranian soda brand that enjoys widespread popularity not only in Iran but also across the Middle East, including Saudi Arabia, Iraq, Oman, and Qatar. Established in 1954 during the Pahlavi dynasty as a local subsidiary of U.S. Pepsi-Cola, the brand was nationalized after Pepsi withdrew from Iran following the Islamic Revolution in 1979. Up until the implementation of U.S. sanctions against Iran in 2018, ZamZam Cola was considered one of Iran's top three cola brands, alongside Coca-Cola and Pepsi-Cola.

Subsequently, ZamZam Cola, together with its headquarters and affiliated private bottling plants, expanded its production and achieved a 50% market share in Iran. Before the imposition of U.S. sanctions, the company exported its cola products not only to the Middle East but also to Europe and North America.

More Than 800 IRGC-Affiliated Companies..."Controlling Over 40% of Iran's Economy"

The IRGC is widely known externally as a military organization under the direct command of Iran's Supreme Leader, but in reality, it is regarded as one of the largest conglomerates in the Middle East. The IRGC owns major enterprises in Iran's key sectors, including construction, manufacturing, and petrochemicals, reportedly controlling over 40% of the national economy.

According to the BBC, the IRGC dominates Iran's economy through Khatam al-Anbiya Construction Group (KCB), which is recognized as one of the largest holding companies in the Middle East. KCB controls four major intermediate holding companies: Karbala, which specializes in road and pipeline construction; Qaem, which focuses on dam and power plant construction; Kowsar, an automobile and aircraft manufacturer; and Nuh, a petrochemical plant construction company.

Through these companies, KCB alone reportedly controls over 800 firms, with combined revenues reaching 40% of Iran's gross domestic product (GDP). The number of employees at these firms totals around 170,000, nearly matching the IRGC's own military personnel, which stands at about 180,000, according to the BBC.

There have been criticisms within Iran regarding the IRGC's excessive dominance over the economy. In June 2017, then-President Hassan Rouhani, a moderate reformist, criticized the IRGC as "a government with guns," saying, "The IRGC secures every project contract by leveraging its political influence, and no one dares to compete with them."

Extended U.S. Maritime Blockade Intensifies Economic Pressure..."Concerns Over Corporate Restructuring"

Reuters Yonhap News

It has been reported that the IRGC and the Iranian government are grappling with job losses as restructuring intensifies at affiliated companies due to the prolonged U.S. maritime blockade. On May 11 (local time), Tasnim News Agency quoted Iranian official Gholamhossein Mohammadi as saying, "Since the recent conflict, 1 million jobs have disappeared, and up to 2 million people are either directly or indirectly unemployed." The Iranian Industrial Adjustment Committee also warned that as many as 3.5 million workers could be affected.

As a result of the U.S. maritime blockade, daily crude oil export revenues, which once reached $500 million (about 744 billion won), have plummeted. Disruptions in the import of raw materials and the export of finished products have led to production shutdowns at many companies. According to The New York Times, one large textile factory in western Iran laid off 700 of its 800 employees, and several hundred workers have been affected by restructuring in the northern industrial zone as well.

Iran's new leader Mojtaba Khamenei also urged companies to "refrain from layoffs as much as possible" in a statement released on Labor and Teachers' Day on May 1. In response to workers' dissatisfaction, the government raised the minimum wage by 60% in March, but The New York Times pointed out that this has only increased the labor cost burden on companies, accelerating layoffs.

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