Boycotts of Danish products costing companies millions

Consumer boycotts of Danish goods in Muslim countries in protest of the publication of caricatures of the Prophet Mohammed are costing Denmark’s companies millions, and have raised fears of irreparable damage to trade ties.

From Havarti cheese to Lego, Danish products have been yanked off the shelves of stores in Saudi Arabia, Kuwait and other countries around the Middle East as Muslims await an apology for the cartoons, which the Copenhagen government has said it cannot give.

The boycotts began in Saudi Arabia on January 26 when supermarkets either put up signs saying to stop buying Danish goods or removed products from shelves.

Since then it has spread to other Muslim nations, and even to Western stores doing business there.

A supermarket in Cairo run by France’s Carrefour has had signs, for example, saying that it is not offering Danish products “in solidarity with Muslims and Egyptians”. Carrefour said the store was a franchise run by a local company.

Carrefour said it is “strictly neutral” but “stores operated by our partners or franchises are free to make commercial decisions according to the local situations”.

Indonesia’s importers association began boycotting Danish goods yesterday, which it said made up £43m (€62.8m) in 2005, about 1% of the nation’s annual imports.

In Syria, banners on walls and storefronts all call for consumers to avoid Danish products.

“It’s a situation that causes a great concern from our members,” said Henriette Soltoft, director of international market policy for the Confederation of Danish Industries.

“There’s also the fear (for the future) … that the consumer will not remember exactly what happened, but they will remember the connection to Denmark,” she said, noting that the Middle East is seen as a growth area.

“Our good relations with these countries have been damaged but we don’t know yet to what extent – that we’ll see in the future and it will depend on how soon this crisis will be solved and how it will be solved.”

The drawings published by newspaper Jyllands-Posten in September have sparked protests, sometimes violent, in Muslim countries.

Islam widely holds that representations of Mohammed are banned for fear they could lead to idolatry.

Iran’s Foreign Minister Manushehr Mottaki reiterated a common position today, saying on a visit to Lebanon that “in order for the Danish government to mend its relations with the Islamic world and Muslim peoples, it should issue a formal apology”.

Danish Prime Minister Anders Fogh Rasmussen has repeatedly rejected such demands, saying the government cannot be held responsible for the actions of an independent newspaper.

The paper itself has apologised for offending Muslims, but has stood by its decision to print the drawings, citing the freedom of speech.

EU Trade Commissioner Peter Mandelson has warned governments that if they are behind the boycotts that they could face action at the WTO if the EU proves they are involved. If the boycotts are purely consumer-driven, however, little can be done.

Denmark’s Danske Bank estimates Danish goods worth around £1bn (€1.5bn) annually are threatened in 20 Muslim countries by the boycott.

Denmark’s overall 2004 exports totalled about £40bn (€58.4bn).

But Soltoft cautioned that the damage goes beyond exports, extending to service contracts, shipping and production facilities in the area – losses that cannot yet be quantified.

“It’s really difficult to give an exact picture of the situation for the time being,” she said.

Arla Foods, one of Europe’s largest dairy companies, is thought to be the worst hit. Jacob Mikkelsen, the company’s manager for the United Arab Emirates and Oman, said it has lost an estimated £700,000 (€1m) each day of the boycott.

“We have sympathy for Muslims over this issue and we encourage a dialogue between the parties,” he said, also calling on the government to issue a formal apology over the issue.

Arla, which draws some 6% of its revenues from the Arab Gulf states, employs about 1,500 people in the region. Mikkelsen warned the company may have to start laying off workers if the boycott continued.

Other companies have been affected to a lesser extent, like Lego, which said Middle Eastern sales only account for 0.2% of its sales and that many do not identify it as a Danish company.

“We have never marketed ourselves as a Danish product, we see ourselves as an international brand,” said spokeswoman Charlotte Simonsen. “You can ask Americans who think it is American, ask Germans who think it’s German – many people don’t know that it’s Danish.”

The boycott has also spawned a grass-roots internet campaign by people around the world urging others to “Buy Danish”, generally in support of freedom of speech.

“The Danish government has nothing to do with it and has been very correct that they have nothing to say about what newspapers publish, and we should not let these religious fanatics try to make them,” said Tijl Vercaemer, an engineering student in Ghent, Belgium.

He started his website after watching Palestinian gunmen briefly take over an EU office in Gaza on January 30 in anger over the drawings.

Yesterday, Vercaemer started selling stickers to cover his costs, with the slogan “Help the Danes defend our freedom: SUPPORT DENMARK” and said he has already shipped more than 700.

“It’s hard to say whether the ‘Buy Danish’ campaign really works, it was more intended as moral support,” the 23-year-old said.

“But I was very happy to read ... that some companies say that they really thought the ’Buy Danish’ campaign could give them more income than the boycott could cost them.”

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