Riyadh, Asharq Al-Awsat – The boycott of Danish products in Saudi Arabia, following the publication of a series of drawings featuring Prophet Mohammed was out of control, according to major food distributors and shopping mall owners. In the three weeks since the boycott started, the network of relations between importers, manufacturers and supermarkets has reached a complete standstill.
The Danish newspaper Jyllands- Posten published twelve cartoons of the Prophet on 30 September. They were re-printed in a Norwegian paper on 10 January sparking anger across the Muslim world and have since been re-published in France, Germany, Italy and Spain.
Abdullah Saleh al Athim, the general director of al al Athim Trading Company, revealed that the boycott is no longer bound by personal decisions taken by certain companies. Officials at Danish food manufacturers have indicated their products have lost all their share of the market, which would have long-term damage to their companies.
A spokeswoman for Arla Foods indicated the Danish company had lost $20million US since consumers across the Middle East and North Africa have decided to shun its products, which represents between 8 and 10% of its annual revenue. She said the company had retained its 800 employees in Saudi Arabia despite the suspension of work. Talks were currently underway with headquarters to inform them of the losses incurred, totaling $1.8 million US a day.
Al Athim indicated that his company had acted, on its own initiative, after the row over the Danish cartoons erupted, and stopped selling Danish products in 70 outlets and terminated new contracts made in conjunction with Saudi importers by recovering all the products stored in warehouses, worth in excess of 260 thousand USD. The total value of products that stopped or cancelled reached $21 million US OR 10% of gross sales.
Danish exporters and food manufacturers had expressed their disapproval of the drawings after they were published, al Athim added. He described the current situation as out of control and stressed that his company had withdrawn 300 products from 50 companies.
Al Athim Trading Company, which represents 3% of the entire Saudi retail market with sales of up to $400 million US noticed that local manufacturers were filling in the gaps left by Danish companies and that Saudi businesses were the main beneficiaries of the boycott.
Rami Rajib, an engineer and marketing director at al Azizah Panda said his company had withdrawn all Danish products from the shelves in 50 branches across Saudi Arabia and had returned all its outstanding inventory to its importers. He also noted that local products had benefited from the economic embargo on Danish food stuff.
Astrid Gade Niels, Arla Food’s spokeswoman, revealed losses were in excess of $20 million US, since the boycott of products such as Lurpak and Puck had began, due to a decrease in sales volume throughout the Middle East and North Africa. Beginning on 28 January, the boycott was costing an estimated $1.8 million a day. She indicated that these significant financial losses will also affect farmers and stock holders.
Niels also indicated that sales in the Middle East region had accounted for between 8 and 10% of the company’s total international sales and that it owned a plant in Saudi Arabia in cooperation with local partners who own 25% of the capital. The plan produces “cheese, mozzarella, juices, yogurt and a number of milk products.”
In a statement to Asharq al Awsat, Niels said she was not aware of any case of mistreatment against its Danish employees across the Kingdom. With the deteriorating security situation in Lebanon , Arla Foods had asked its employees to leave the country. She added that the company had kept in contact with its local representatives in preparation to resume its activities once the boycott is called off but admitted that it would have long term effects on the company, as consumers find switch to alternative brands and working relations with local partners is disrupted.
Despite a halt to production in the Kingdom, Niels indicated Arla Foods intended to keep its 800 strong workforce in preparation for a resumption of production.
Abdulaziz al Hanaki, a Saudi lawyer, told Asharq al Awsat that the lists of products to be boycotted reflected the private interests of some parties, including local manufacturers, and could cast doubt on the legality of the move.
He told Asharq al Awsat that in its current form the boycott was disorganized and unsafe, because matters were left in everybody’s hands. Which countries should be included in the lost? Should all the countries where the drawings were republished be included? Al Hanaki indicated that those who called for the boycott were mistaken in their understanding of the responsibility of the press, adding that it was necessary all parties be accorded legal due process in Danish courts.
Saudi imports from Saudi Arabia totaled 87 thousand tons at the end of 2004 at a value of $373 million dollars US. They included processed and fresh cheese, baby food, medicines, machines for milk processing and military equipment.