Danone’s profits curdled by Morocco boycott

Danone said their net profit decreased by 4.1 percent in 2018. (Reuters)
Updated 19 February 2019
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Danone’s profits curdled by Morocco boycott

  • Moroccans started a boycott against Danone’s milk because of the high prices
  • The boycott is going on since April 2018

PARIS: A consumer boycott on Danone products in Morocco contributed to the French food giant’s profits and sales sinking last year, it said Tuesday.
The world’s largest yoghurt maker said in a statement that its net profit fell by 4.1 percent to $2.65 billion in 2018.
Sales dropped by 2.1 percent in the last three months of the year, driven by a 35 percent plunge in Morocco, where there has been unprecedented boycott campaign over high prices against Danone milk and two other well-known brands since April.
The boycott’s impact in 2018 “on total net sales was a decrease of -$201 million versus 2017 net sales, of which around two thirds come from losses in milk sales, and one third from losses in dairy products,” the company said in a statement.
Chief financial officer Cecile Cabanis said in a conference call that there was still a market share for Danone’s products in Morocco, but she did not expect to return to growth there before the end of 2019.
The boycott campaign against the high cost of living in Morocco spread like wildfire online last year, calling on Danone milk, Afriquia service stations and Sidi Ali water — the leaders in their sectors — to lower their prices.
Despite the boycott, the company said its full-year reported sales were down just 0.7 percent
It benefited from sales of dairy products stabilizing in Europe, growing strongly in the CIS region that includes most ex-Soviet countries and also improving in Latin America.
In North America, sales in the “essential dairy and plant-based” food products division surged by 12.2 percent to five billion euros.
Sales of infant formula products fell in China, but Cabanis said the decline was slowing, dropping from 20 percent in the third quarter to 10 percent in the fourth.
Looking ahead to the current year, Danone is aiming for like-for-like sales growth of three percent and an operating margin above 15 percent.
Following the announcement, the company’s share price bumped upwards by 0.3 percent in morning trading in Paris.


Apple’s Cook to China: keep opening for sake of global economy

Updated 23 March 2019
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Apple’s Cook to China: keep opening for sake of global economy

  • Cook’s comments come as Apple weathers sinking sales in China
  • Despite official pledges and repeated assurances that China would continue to open its markets

BEIJING: Apple chief executive Tim Cook nudged China on Saturday to open up and said the future would depend on global collaboration, as the United States and China remained locked in a bitter trade dispute.
“We encourage China to continue to open up, we see that as essential, not only for China to reach its full potential, but for the global economy to thrive,” Cook said at a China Development Forum in Beijing.
Despite official pledges and repeated assurances that China would continue to open its markets, some analysts worry that its reform project has slowed or even stalled under President Xi Jinping, who has sought greater control over the economy and a bigger role for state-owned firms at the expense of the private sector.
Cook’s comments come as Apple weathers sinking sales in China because of a contracting smartphone market, increasing pressure from Chinese rivals, and slowing upgrade cycles. The company reported a revenue drop of 26 percent in the greater China region during the quarter ending in December.
Before those results came out, in a January letter to investors, Cook blamed the company’s poor China performance on trade tension between the United States and China, suggesting that pressure on the economy was hurting sales in China.