Results of Ethical Consumerism on Danish Firms – By Ali Adel Murad – Bahrain -UOB

In Brief
Friday, January 27, 2006
On January 26, 2006, a massive boycott of dairy produce from Arla Foods started over what is perceived as a Danish attack on Muslim values.

Marianne Castenskiold, a senior consultant for Dansk Industri, expressed a fear that the boycott will spread to other countries in the region and have detrimental effects on other Danish products. Denmark is one of the leading exporters of agriculture in northern Europe, whose economy is heavily dependent on foreign trade and investment.

The boycott has been announced at Friday prayer services in Muslim mosques since January 20, 2006, obviously helping to foment popular support of the nations response to Denmark's alleged ignorance of Muslim values.

The boycott is a response to the publication of an article in a major Danish newspaper, Jyllands-Posten. In its September 30, 2005 issue, the paper printed 12 drawings of the Muslim prophet Muhammed, drawings of the prophet are prohibited by Islamic Law. In an attempt to start a debate over freedom of speech in Denmark, the newspaper printed 12 drawings of the prophet. Four of these were of a satirical nature, with one showing the prophet with a turban hiding a lit bomb.

The immediate reactions to the publication of the drawings included ambassadors from 12 Muslim countries demanding that the Danish Prime Minister, Anders Fogh Rasmussen, denounce the newspaper. Rasmussen rejected this demand, stating that "Danish freedom of speech does not allow the government to control what newspapers print".

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

From Havarti cheese to Lego toys, 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 have also spawned counter-boycott campaigns to "Buy Danish."

The boycotts began in Saudi Arabia on Jan. 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."
A spokesman for Carrefour in France said the store was a franchise run by a local company. While Carrefour is strictly neutral, he said, the stores operated by partners and franchises are free to make commercial decisions according to the local situations.

Indonesia's importers association on Wednesday began boycotting Danish goods, which it said made up $74 million in 2005, about 1 percent of the nation's annual imports.

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

Employees of Danish Lurpak butter agent Yasser Al-Srayyed recently raised a banner in front of his Damascus office saying: "Yasser al-Srayyed has stopped importing Lurpak." The banner is now gone, but the imports have not resumed.

"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, which represents Denmark's major companies.

"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 Muhammad are banned for fear they could lead to idolatry.

Iran's Foreign Minister Manushehr Mottaki reiterated a common position on Thursday, saying 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 demands for an apology, saying the government cannot be held responsible for the actions of an independent newspaper. The paper itself has apologized for offending Muslims, but has stood by its decision to print the drawings, citing freedom of speech.

European Union Trade Commissioner Peter Mandelson has warned governments that if they are behind the boycotts that they could face action at the World Trade Organization 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 $1.6 billion annually are threatened in 20 Muslim countries by the boycott. That compares with worldwide exports in 2004 of about $73 billion.

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 in an interview Thursday.

Arla Foods, one of Europe's largest dairy companies, is thought to be the worst hit, losing an estimated $1.6 million each day.

Others have been affected to a lesser extent, like Lego, which said Middle Eastern sales only account for 0.2 percent 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 supportdenmark.com Web site after watching Palestinian gunmen briefly take over an EU office in Gaza on Jan. 30 in anger over the drawings.
Vercaemer said he has received thousands of e-mails in response to his site — one of many that have sprouted up in support of Denmark — including from Muslims expressing their solidarity.

On Wednesday he started selling stickers, at about $1 for 15 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."

Muslims urge end to boycott of Danish products
DUBAI — A group of prominent Muslim scholars has called for an end to the boycott of the Danish retailer Arla Foods, in what may prove to be a major step toward resolving the crisisbetween Muslim nations and Denmark over the publication last autumn of cartoons depicting the Prophet Muhammad.
The International Committee for the Support of the Final Prophet, in a statement issued at the end of a meeting of prominent religious leaders in Bahrain last week, advised that "Arla Foods should be withdrawn from the boycott on Denmark," in recognition of the company's efforts to reach out to the Muslim world.
Arla, the second-largest dairy products company in Europe and the largest Danish packaged foods supplier in the Middle East, saw its sales drop to nearly zero in the region when the boycott began in February. Although the statement names only Arla, the move is widely expected to break the embargo on other Danish suppliers in the region.
The scholars' statement said that their recommendation "is based on the announcements that Arla Foods had placed throughout the Middle East condemning the actions of the Danish newspaper, as well as refusing to accept any excuse in this regard."
"Arla has been facing tremendous pressure and criticism for its position," it added.
Arla last week placed full-page ads in major Arab newspapers condemning the cartoons for insulting Islam, a move that sparked as much approbation in Denmark as it did applause in the Middle East.
"We made the decision" to place the ads "because we really believe that you shouldn't insult people's religions," said Jan Petersen, regional director for Arla Foods Middle East. "As a company we have been caught in the middle of something that nobody could have ever expected."
The controversy over the publication last September of the cartoons in the Danish newspaper Jyllands-Posten boiled over in early February as a region-wide boycott of Danish products. The boycott quickly spread across the Middle East, one of the fastest growing markets for Danish packaged goods companies, and escalated into all-out violence in Syria, Lebanon and other Muslim countries.
Danish diplomats said the latest resolution was the product of intense political, diplomatic and social exchanges and weeks of dialogue between Danish representatives and businessmen and Muslim leaders and communities.
Denmark plans to increase its budget for a program set up in 2003 to improve relations with Middle East countries, currently at about 100 million Danish crowns, or $16.4 million, a year, by about 20 percent, Reuters reported Monday, citing Danish government officials.
"We are extremely pleased," Thomas May, the Danish consul general in Dubai, said of the call to end the boycott. "Taking product companies as hostages has never been a solution. I am glad to see that things are getting back to normal."
The conflict over the 12 cartoons - one of which showed the prophet wearing a turban shaped like a bomb with a lit fuse - simmered for months before it erupted into violent protests, flag- burning and attacks on Danish and other Western embassies in several Muslim countries. Dozens of people were killed in the protests. Denmark temporarily closed its embassies in Lebanon, Syria, Iran, Indonesia and Pakistan.
Many muslim scholars were divided about ending the boycott.
"Any human being or a country that lifts the ban and stops boycotting Danish companies or the arrogant Danish government is not worthy of being a Muslim," said Abd Al Moaty Bayoumy, former dean of the faculty of theology at Al-Azhar University in Cairo. The boycott must continue, he said, "until the government, not the companies apologize."
But Abdel Ghaffar Helal, a professor of Islamic jurisprudence and Koranic studies at Al-Azhar, applauded the step for emphasizing dialogue over anger.
"We urge Muslims not to boycott but to engage. All Westerners see of Muslims is the negative news in the media. They should see another side," he said.
Many retailers said they intended to keep Danish goods off their shelves. By Tuesday, Petersen said, Arla's products could be found in only 1,500 stores in the region, far from the 50,000 stores that carried its products before.
"The boycott is not in our hands or in the hands of the government. It's in the hands of the people and ultimately the consumer must decide," said a product manager at the Sharjah Cooperative Society, a retailer in the emirate of Sharjah, speaking on condition of anonymity because he was not authorized to speak to the media.
At least some customers have already decided. At a local Geant outlet in Dubai on Tuesday, Mansoureh Abidi, a housewife from Iran, said she was very happy to find Three Cows cheese on shelves again. "I bought it before and I like it very much. Last week, when I saw it on the shelf, I thought, 'This is my lucky day.' I bought 10 packages," she said.
Nada el Sawy in Dubai and Abeer Allam in Cairo contributed reporting for this article.

Edits have been made to the original content by Ali Adel.

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