Danone Morocco saga highlights enduring role of consumer boycott

Danone Morocco saga highlights enduring role of consumer boycott
Centrale Danone lost 40 percent of its sales and suffered a net loss of €13.5 million in the first half of 2018. (Reuters)
Updated 12 January 2019

Danone Morocco saga highlights enduring role of consumer boycott

Danone Morocco saga highlights enduring role of consumer boycott
  • Success of social media campaign against high milk prices is in the tradition of the great Iranian tobacco revolt
  • Centrale Danone 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

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.”

FASTFACTS

With products sold in over 120 markets, Danone generated sales of €24.7 billion in 2017.


AlUla awards $14m housing complex contract

AlUla awards $14m housing complex contract
Updated 16 June 2021

AlUla awards $14m housing complex contract

AlUla awards $14m housing complex contract
  • The project, which consists of 150 modular, high-quality and furnished units, is scheduled to be completed in three months

RIYADH: Red Sea International Co. said it won a SR52.9 million ($14.1 million) contract to design and build a housing complex in AlUla, northwest Saudi Arabia.

The contract for 150 “modular, high-quality and fully furnished accommodation units” was awarded by the Royal Commission for AlUla (RCU) and is expected to be complete in three months, Red Sea International said in a filing to the Tadawul stock exchange on Wednesday.

AlUla is home to the archeological site of Dadan, which is being developed into a cultural tourist destination.

Dadan, a civilization that dates back more than 2,700 years and pre-dates the Nabataean civilization as well as the Roman presence in the Arabian Peninsula, was once the capital for the Dadan and Lihyan Kingdoms and is considered to be one of the most developed 1st-millennium BCE cities of the Arabian Peninsula.

In April, Amr AlMadani, CEO of the RCU, the entity set up by the Saudi Ministry of Finance in July 2017 to manage the development of the site, told Arab News the commission has invested $2 billion in initial seed funding for the initial development of the historical development area. A further $3.2 billion, which will come from public-private partnerships, has also been earmarked for spending on priority infrastructure ahead of the completion of phase one of the project in 2023.

“We are well into executing phase one. This includes the upgrade of the airport, which has been completed. We will start our low-carbon tram development infrastructure as well. And, so far, our visitor experience centers in the heritage and nature site are being upgraded,” AlMadani said.

The “Journey Through Time Masterplan” was recently announced by Crown Prince Mohammed bin Salman. Upon completion in 2035, the development project aims to create 38,000 new jobs, attract 2 million visitors a year, expand the population of the area to 130,000, and contribute $32 billion to the Kingdom’s economy.


Dubai-based Luxury Closet raises $14m for thrifty lovers of luxury

Dubai-based Luxury Closet raises $14m for thrifty lovers of luxury
Updated 16 June 2021

Dubai-based Luxury Closet raises $14m for thrifty lovers of luxury

Dubai-based Luxury Closet raises $14m for thrifty lovers of luxury

RIYADH: The Luxury Closet, an online platform for buying and selling used high-end goods, secured fresh financing worth $14 million to bankroll the company’s expansion outside the UAE, Bloomberg reported.
The Dubai-based startup is raising funds for international expansion by marrying luxury with thrift.
The financing is led by GMP Capital, alongside international and local investors including Huda Beauty Investment.
“Re-sale is the future of shopping,” said Kunal Kapoor, chief executive and founder of The Luxury Closet. 
“We expect one in six transactions to be pre-owned by the end of the decade,” he added.
Gulf spending on the resale market was among the highest before the pandemic,according to Bain & Co.
But spending on the local luxury market fell by 17 percent afterward.


Egypt, UK discuss cooperation in electricity sector

Egypt, UK discuss cooperation in electricity sector
Updated 16 June 2021

Egypt, UK discuss cooperation in electricity sector

Egypt, UK discuss cooperation in electricity sector
  • Trevelyan is on her first visit to Egypt since assuming her post
  • During their meeting, Shaker praised cooperation between his ministry and British firms

CAIRO: Egypt’s Minister of Electricity and Renewable Energy Mohamed Shaker met with Anne-Marie Trevelyan, British minister of state for business, energy and clean growth.
They discussed how the two countries can enhance cooperation in the electricity and renewable energy sector.
Trevelyan, who is also UK representative for the 2021 UN Climate Change Conference, is on her first visit to Egypt since assuming her post. She will discuss preparations for the conference, set to be held in Glasgow in November.
During their meeting, Shaker praised cooperation between his ministry and British firms, saying they are trusted partners who play a huge role in the electricity sector and in helping achieve the goals of the Egyptian Energy Strategy 2035.


Saudi Arabia co-chairs meeting on restructuring Chad’s debts

Saudi Arabia co-chairs meeting on restructuring Chad’s debts
Updated 16 June 2021

Saudi Arabia co-chairs meeting on restructuring Chad’s debts

Saudi Arabia co-chairs meeting on restructuring Chad’s debts
  • Chad is the first country to request the restructuring under the new Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative

RIYADH: Saudi Arabia has co-chaired the fourth creditor committee meeting to help Chad restructure its debts under a new G20 framework.

The African state requested the restructuring in January as it struggled with a high debt burden exacerbated by the coronavirus disease (COVID-19) pandemic.

Chad is the first country to request the restructuring under the new Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative. The framework was agreed in November by the G20 under Saudi Arabia’s presidency and the committee held its first meeting in April this year.

Saudi Arabia co-chaired the June 10 virtual meeting with France. The other committee members also included China and India, while representatives from the International Monetary Fund (IMF) were also present as observers.

“The creditor committee supports Chad’s envisaged IMF upper credit tranche program and its swift adoption by the IMF Executive Board to address Chad’s urgent financing needs. The creditor committee encourages Multilateral Development Banks to maximize their support for Chad to meet its long-term financial needs,” the committee said in a press statement.

The statement added that committee members “are committed” to negotiate with Chad to restructure its debts.

The committee highlighted that it was important that private sector creditors be offered “debt treatments on terms at least as favorable as those being considered by the creditor committee, in line with the comparability of treatment principle.”

The IMF in January completed initial talks with Chad on a new medium-term financing program worth about $560 million. According to the IMF, Chad’s total debt amounted to $2.8 billion, or 25.6 percent of gross domestic product (GDP), at the end of 2019. China is its largest official bilateral creditor, according to a report by Reuters.


Mubadala to invest $100m in a Chinese on-demand trucking startup before IPO

Mubadala to invest $100m in a Chinese on-demand trucking startup before IPO
Updated 16 June 2021

Mubadala to invest $100m in a Chinese on-demand trucking startup before IPO

Mubadala to invest $100m in a Chinese on-demand trucking startup before IPO
  • Mubadala to take part in private placements before IPO
  • Ontario Teachers’ Pension Plan Board also investing $100 million

NEW YORK: UAE sovereign investment vehicle Mubadala plans to invest $100 million in Full Truck Alliance Co., a Chinese trucking startup that styles itself as “Uber for trucks,” Bloomberg reported.
Full Truck Alliance (FTA) said on Tuesday it is aiming for a valuation of over $20 billion in its US initial public offering, marking another high-profile Chinese stock market listing in New York this year.
This coincides with a private placement in which the Ontario Teachers’ Pension Plan Board and Mubadala will each purchase $100 million worth of Class A ordinary shares, Bloomberg said.
FTA, more popularly referred to as Manbang in China, said it is offering 82.5 million American Depositary Shares (ADS) at between $17 and $19 per ADS. Each ADS represents 20 Class A ordinary shares.
At the top end of the price range, FTA could raise as much as $1.57 billion from the IPO,which would make it the largest US listing for a Chinese company this year, according to data provider Refinitiv. Chinese vaping firm RLX Technology Inc. raised $1.4 billion in its US IPO in January.
Those figures are expected to be dwarfed in the coming weeks when China’s largest ride-hailing company Didi Chuxing launches its IPO, which is expected to be the biggest share sale of the year. Reuters has previously reported that Didi could raise as much as $10 billion from its stock market flotation.
A spate of richly valued Chinese tech startups have targeted IPOs in the US in recent years, as they can tap into the deepest capital pool in the world and avoid tighter regulatory scrutiny in major Asian exchanges like Hong Kong.
Last year, Chinese companies raised $12 billion from US listings, nearly triple the amount raised in 2019, according to Refinitiv data. This year is expected to comfortably surpass last year’s tally.
Chinese companies have so far raised $5.82 billion in the United States this year, according to Refinitiv data.
FTA, formed out of a merger in 2017 between two digital freight platforms, Yunmanman and Huochebang, is led by former Alibaba executive Peter Hui Zhang.
The company runs a mobile app that connects truck drivers to people that need to ship items within China. It was the world’s largest digital-freight platform by gross transaction value last year, according to research from China Insights Consultancy that was commissioned by the company.
In November, FTA was valued at nearly $12 billion after a $1.7 billion investment, Reuters reported. That investment round was led by Japanese conglomerate SoftBank’s Vision Fund, Sequoia Capital, Permira Capital and Fidelity.
China’s tech giant Tencent Holdings Ltd. is also one of the company’s backers.
Morgan Stanley, CICC and Goldman Sachs are among the underwriters for FTA’s offering in New York. The company plans to list on the New York Stock Exchange under the symbol “YMM.”