Danish business feels the pain of cartoon boycotts

[SOO MAAL]

Guaranteed! you won't find Danish products on our shelves

 

Danish business feels the pain of cartoon boycotts

 

 

Danish companies switch 'Made in Denmark' labels to 'Made in EU' to camouflage origin of Danish production.

 

 

By Slim Allagui – COPENHAGEN

 

Danish businesses that have been targeted in Muslim countries owing to the publication of Islamic political cartoons now feel the pain of growing boycotts that they are struggling to circumvent.

 

 

Denmark's companies are being singled out, especially in the Middle East, by consumers and businesses angry with the Scandinavian country where the daily newspaper Jyllands-Posten organized and published the offending caricatures.

 

 

The Danish government has insisted that its economy was not under threat, but individual businesses are feeling the effects.

 

 

"The boycott mostly hurts consumer goods companies, while capital goods exports are less affected," said Henriette Stoeltoft, head of the Confederation of Danish Industries' (DI) international markets division.

 

 

Dairy company Arla Foods, Denmark's biggest exporter to the Middle East, has been losing 10 million kroner (1.6 million dollars, 1.3 million euros) per day since its products were taken off the shelves in several countries two weeks ago, and has had to temporarily lay off 125 workers.

 

 

Like Arla, which now tries to sell its butter in wholesale 25-kilo containers without its brand name visible, many companies have changed their labeling.

 

 

Some have switched "Made in Denmark" labels to "Made in European Union", while others use foreign subsidiaries to camouflage the origin of Danish production, according to DI.

 

 

Arla will also make an effort at the forthcoming Gulf Food fair in Dubai "to renew contact with our clients", said company spokeswoman Astrid Gade Nielsen.

 

 

"My feeling is that the boycott is getting stronger," said Sune Salling-Mortensen, spokesman for industrial pumps company Grundfos, in comments to the Boersen business daily.

 

 

The group said it had been threatened with a boycott by four or five customers, notably in Saudi Arabia.

 

 

Other companies have also grown more concerned, having initially hoped that the storm in Muslim countries would quickly blow over.

 

 

The pharmaceutical company Novo Nordisk said Wednesday that it had lost a 200-million-kroner insulin contract in Turkey.

 

 

Danisco, one of the world's largest food ingredients companies, said it had lost several minor contracts, while others were suspended.

 

 

"We are feeling the impact of falling sales. But we hope that our order books will fill up again when our customers' stocks run low," said Danisco spokesman Carl Johan Corneliussen.

 

 

The industrial meat group Danish Crown said it had strongly reduced production at its Dubai plant, and cement maker Aalborg Portland shut down its Asian Internet site following threats.

 

 

Following a boycott announcement on Wednesday by importers in Indonesia, where Danish companies annually book sales of 509 million kroner, investors now fear a boycott in Malaysia.

 

 

Danish exports to Muslim countries are worth around 14 billion kroner a year, of which eight billion are in the Middle East.

 

 

That represents just three percent of all Danish exports however, leading the government and economists to conclude, like Danske Bank chief economist Steen Bocian, that "the Danish economy is sufficiently robust to resist a complete boycott by Muslim countries."

 

 

But in a worst-case scenario, 10,000 jobs could be at stake, he said, a significant figure for this country of just 5.4 million inhabitants.

 

 

In addition, the export figure does not take into account local production owned by Danes, or sectors such as services, communications, consultancy services and shipping, which generate a combined eight billion kroner per year.

 

 

Danish shipping companies now often take down the Danish flag when docking in ports in Muslim countries, where they generate five percent of their revenues, or about seven billion kroner.

 

 

To counter boycott calls, companies have also launched an international Internet campaign angling to get consumers to "Buy Danish", citing Carlsberg beer, Lego toys and Arla's dairy products among the brands to support.

 

 

Jyske Bank has estimated that the cost of the boycott to the Danish economy could total 7.5 billion kroner.

[Jamilah]