Danone Morocco saga highlights enduring role of consumer boycott

Author: 
Anna Pukas
ID: 
1547240572474430300
Sun, 2019-01-13 00:03

LONDON: In April, a series of posts appeared on Facebook and
Twitter, urging the people of Morocco not to buy Danone brand fresh
milk as a protest against the company’s high prices.
Within weeks, Centrale Danone, which is French-owned, lost 40
percent of its sales and suffered a net loss of €13.5 million in
the first half of 2018.
It did not stop there. The company employs 6,000 people in Morocco
but did not renew contracts with more 880 temporary workers as it
was forced to cut milk production by 30 percent. That led to
disgruntled employees protesting in front of the national
parliament against the boycott which threatened their
livelihoods.
Two months later, in June, the chief executive of Danone, Emmanuel
Faber, arrived in Morocco to “listen and understand the reasons
for the boycott from the people on the ground.”
In September, after a consultation exercise lasting weeks, Faber
announced a cut in the price of fresh pasteurised milk and revealed
a new, cheaper semi-skimmed milk-in-a-pouch. He also declared that
despite its troubles, Danone “will never leave Morocco.”
As well as Danone milk, protesters targeted Sidi Ali mineral water
and Afriquia petrol stations.
“It was an incredible campaign,” said Soraya El-Kahlaoui, a
lecturer in Morocco. “It involved all types of people — working
class, the bourgeoisie — and it got the result everyone
wanted.”
The Danone boycott in Morocco succeeded because it was about more
than milk prices. It was also about popular struggle.
“For any protest to succeed, people have to be mobilized, they
have to be persuaded of the rightness of a cause,” said John
Chalcraft, professor of Middle East history and politics at the
London School of Economics. As a tool of protest, boycotting can be
both powerful and safe, he added. “People have a role without the
risk of ending up in prison. No one can accuse them of breaking the
law.”
Nor is it new to the Middle East. In 1890, Iranians revolted en
masse against the Shah granting a tobacco concession to Britain.
The deal gave the Imperial Tobacco Corporation of Persia a monopoly
over the production, and sale of tobacco for 50 years. In return,
the Shah, Nasir Al-Din, was to be paid £15,000 a year (equivalent
to $2.35 million today) plus a share of the profits.

 

Coming on top of other concessions granted to foreigners, this
was too much. Persian tobacco was much prized and at the time the
industry employed more than 200,000 people. The first protests were
organized by bazaaris (merchants) but the clergy soon joined in,
issuing a fatwa against tobacco consumption. The merchants closed
the bazaars and Iranians — such heavy smokers that they even lit
up in mosques — gave up smoking. Beaten by the boycott, the Shah
canceled the concession in January 1892.
Just as the tobacco boycott was a protest against exploitation by
the rich, so the inflated milk prices in Morocco were seen as
evidence of collusion between big business and the government.
“It would not be stupid to compare that earlier period with the
contemporary one,” said Chalcraft. “Boycott is a familiar form
of protest in the Middle East.”
In 1945, the Arab League adopted a boycott of all Israeli goods.
Six years later, they extended the boycott to anyone trading with
Israel. The blacklisted companies included big names such as
Revlon, Bulova Watches and the Chase Manhattan Bank. The boycott
ended gradually. Egypt dropped out in 1979, Jordan and the
Palestinian Authority in 1994 and finally, the GCC in 1994.
It was partly revived in 2005 when Palestinians launched the
Boycott, Divestment and Sanctions (BDS) movement against Israel,
and more particularly against goods emanating from or being sold in
the settlements in the Occupied Territories.
Patrick Barwise, emeritus professor of management and marketing at
London Business School, doubts the effectiveness of boycotts.
“The buying behavior of most consumers is much less affected by
ethical concerns than they might claim in response to a survey,”
he said. “Tech firms such as Facebook, Amazon and Uber have been
widely criticized for some of their business and labor management
practices but very few consumers have stopped using them on those
grounds.”
Danone said the milk boycott was in reality a wider protest against
the high cost of living in Morocco. After conducting a wide public
consultation exercise over the summer, involving nearly 10 million
people, Danone reduced the price of a 470ml pack of milk down to
what it was 10 years ago.
The milk boycotters’ slogan was “Khali i rib” — “let the
milk flow.” Danone adopted the same slogan as it tried to rebuild
consumer trust.
“It hasn’t worked,” said Soraya El-Kahlaoui. “The image of
the brand is very damaged.”

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Source: FS – All-News-Economy
Danone Morocco saga highlights enduring role of consumer boycott