Arabs boycott U.S.

The Washington Times
8 May 2002

From combined dispatches

A growing number of Arabs are shunning U.S. goods, ranging from cigarettes to Big Macs, in protest of Washington's perceived pro-Israel policies.

Unable to influence their own governments, activists in Arab civic organizations, student groups and professional associations are urging their people to buy local and European alternatives to American goods.

Boycott organizers have drawn up lists of companies, mainly American, that are thought to channel aid to Israel. Among them are companies making products from cigarettes and medications to fast food and laundry detergents.

So far, fast-food chains appear to be feeling the pressure the most.

Managers at KFC and McDonald's branches in the Omani capital of Muscat said sales had fallen by 45 percent and 65 percent, respectively, since January.

A senior executive at Kuwait-based Americana, which has exclusive rights to operate several U.S. franchises — including Pizza Hut and Baskin-Robbins — across the Middle East, said that during the past few months profits and sales fell by 45 percent in Jordan, 40 percent in Egypt and 20 percent across the Persian Gulf region.

In the Saudi Arabian city of Jidda, Coca-Cola was the worst hit of the U.S. brands, down 60 percent, said Ibrahim Mahrous, sales manager at the Ben Dawood supermarket. Pepsi Cola sales were off 45 percent, and Procter & Gamble Co. products, such as Pampers diapers, slid as much as 35 percent.

"It's turning very serious," said Mahmoud el-Kaissouni, an executive with an industry association representing 22 fast-food chains, including McDonald's, Kenny Rogers' Roasters and Little Caesar pizza. "The number of people going into these restaurants is less and less every day, despite all that we're doing."

The association has been leading a campaign on television to warn of the threat to Egyptian jobs, he said.

In Morocco, the newspapers L'Economiste and Assabah have started a campaign against the dollar, printing a headline every day urging Moroccans to avoid using the currency in their business dealings.

"Boycott the dollar in your operations for the sake of Palestine. Whenever possible, opt for the euro," it said.

Hamdy el-Sayed said the Egyptian Doctors' Syndicate, which he heads, has sent doctors and pharmacies a list of U.S.-made medical products with alternative local or European products.

"We understand this is not economically effective, because people would continue to buy American goods. This action has more of a symbolic value than a real effect," Mr. el-Sayed said.

In Jordan, Lebanon and Syria, some private hospitals have stopped buying products from drug makers, including New York-based Bristol-Myers Squibb.

Analysts are not worried about the effect on the drug maker, saying that the Middle East is only a small portion of its business.

"I'm wondering what they are using as alternatives over there," said Douglas Christopher, analyst with Crowell, Weedon & Co.

He added that such problems are the risk that multinational companies "have to live with."

"It's just part of the political risk that's there," Mr. Christopher said.

Marie Driscoll, analyst with Argus Research who follows several fast-food chains, agreed.

McDonald's, for instance, tries to educate local residents that in fact it is a local company. "They hire locally and source things locally, so when people hurt McDonald's thinking they are hurting America, they are really hurting the local citizens the most," she said.

"Nobody likes to see terrorism, and this is one of the ways they counteract it, but I think we're in a kind of a different world after September 11 and don't know if they've addressed that," she said. "But I don't think that any company has."

• Staff writer Kristina Stefanova contributed to this report.