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‘Serious’ anti-Israel boycott
gains global momentum

By Tim Kennedy
Arab News
May 16, 2002

Estee Lauder, Johnson & Johnson, McDonald’s, Philip Morris, Perrier, Pizza Hut, Disney, Nestle, Coca-Cola, KFC, Kleenex, Tommy Hilfiger, Clinique. On any given day, from New York to Nairobi, from Jeddah to Johannesburg, from Topeka to Timbuktu, these US-based multinationals sell billions of dollars worth of products.

But a growing number of international buyers are shunning goods from these American companies in protest of Washington’s perceived pro-Israel policies.

In Arab countries, many activist civic organizations, student groups and professional associations are urging people to shun American goods in favor of local and European alternatives.

Boycott organizers have drawn up lists of companies, mainly American, that are thought to channel aid to Israel. Among them are companies making products from cigarettes and medications to fast food and laundry detergents. There are even Internet Web pages — and — dedicated to this cause.

So far, fast-food chains appear to be feeling the pressure the most.

Managers at KFC and McDonald’s branches in the Omani capital of Muscat say sales had fallen by 45 percent and 65 percent, respectively, since January.

A senior executive at Kuwait-based Americana, which has exclusive rights to operate several US franchises — including Pizza Hut and Baskin-Robbins — across the Middle East, says that during the past few month’s profits and sales fell by 45 percent in Jordan, 40 percent in Egypt and 20 percent across the Persian Gulf region.

In Jeddah, Coca-Cola is the worst hit of the US brands, down 60 percent, says Ibrahim Mahrous, sales manager at the Bin Dawood supermarket, in an interview with an international wire service. According to experts, in Saudi Arabia Pepsi Cola sales are off 45 percent, and Procter & Gamble Co. products, such as Pampers diapers, have slid as much as 35 percent. “It’s turning very serious,” says Mahmoud El-Kaissouni, an executive with a Cairo-based industry association representing 22 fast-food chains, including McDonald’s, Kenny Rogers’ Roasters and Little Caesar pizza. “The number of people going into these restaurants is less and less every day, despite all that we’re doing.”

The association has been leading a campaign on television to warn of the threat to Egyptian jobs, he said.

In Morocco, the newspapers L’Economiste and Assabah have started a campaign against the US dollar, printing a headline every day urging Moroccans to avoid using the currency in their business dealings.

“Boycott the dollar in your operations for the sake of Palestine. Whenever possible, opt for the euro,” says the advertisement.

Hamdy El-Sayed, director of the Egyptian Doctors’ Syndicate, leads another boycott targeting American-made health care products. His organization has sent doctors and pharmacies a list of US-made medical supplies and tells them which local or European products can be substituted.

“We understand this is not economically effective, because people would continue to buy American goods. This action has more of a symbolic value than a real effect,” says El-Sayed. In Jordan, Lebanon and Syria, some private hospitals have stopped buying products from drug makers, including New York-based Bristol-Myers Squibb.

Specialists in international trade are not worried about the effect on American drug makers, saying that the Middle East represents only a small portion of its business.

“I’m wondering what they are using as alternatives over there,” says Douglas Christopher, analyst with New York-based Crowell, Weedon & Co.

Christopher says that such problems are the risk that multinational companies “have to live with. It’s just part of the political risk that’s there.” Marie Driscoll, analyst with Argus Research who follows several fast-food chains, agrees. She cites McDonald’s as a good example, saying that she tries to make it clear to residents in foreign countries that somebody of their own nationality likely owns their local McDonald’s. “They hire locally and source things locally, so when people hurt McDonald’s thinking they are hurting America, they are really hurting the local citizens the most,” says Driscoll.

“Nobody likes to see terrorism, and this is one of the ways they counteract it,” Driscoll adds. “I think we’re in a kind of a different world after Sept. 11 and don’t know if they’ve addressed that. But I don’t think that any company has.”