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Danish companies feel cartoon boycott Original Source Link: (May no longer be active)
http://www.heraldsun.com/business/wire/22-704322.htmlhttp://www.heraldsun.com/business/wire/22-704322.html
Danish Companies Feel Cartoon Boycott Pain
By DIANA ELIAS : Associated Press Writer
Feb 21, 2006 : 1:51 pm ET
KUWAIT CITY -- It's been 22 years since the Kuwaiti Danish Dairy Co. broke with its partners in Denmark, took Caroline the cow off its packaging and began importing raw materials for ice cream and cheese from other countries.
But when Arabs began boycotting all things Danish over the prophet cartoons, it was the company's name that caused it big problems.
"In other places outside Kuwait, where the company is known, but not as well as it is known locally -- such as Saudi Arabia and the United Arab Emirates -- that has caused a drop of more than 95 percent in our sales," KDD chairman Mohammed Jaafar lamented during an interview with The Associated Press.
In Kuwait, he said, losses were negligible because government-supported supermarkets left KDD products on the shelves -- knowing there was no Danish connection -- even as they pulled foodstuffs made in Denmark.
Also, the company quickly started an advertising campaign with testimonials from the government and Muslim clerics assuring consumers that KDD's Danish connection was in name only.
"We had to give consumers the right information," he said. "They were sending the message to the wrong address."
To overcome confusion in other Arab markets in the Persian Gulf, Jaafar said, a change of name would be put before the company board when it meets next month. But, he said, the switch would be wrenching after 44 years.
Jaafar said there was no way to know if a name change would solve the problem, or just increase losses. He feared consumers outside of Kuwait -- unaware the company has no Danish connection -- might think the new name was sleight of hand.
"There just isn't a good answer," he said.
As badly as KDD has suffered, Danish companies have felt even more pain. From Havarti cheese to Lego toys, products made in Denmark have been yanked off store shelves throughout the Middle East and in other Muslim countries, where governments and consumers have demanded an apology for the cartoons, which the Copenhagen government says it cannot provide.
One of Europe's largest dairy companies, Arla Foods, for example, was thought to be the worst hit, losing an estimated $1.6 million each day.
Jaafar declined to give specific loss figures for KDD beyond the 95 percent sales drop in Saudi Arabia and the UAE. He said the company is privately held and does not publish financial data.
The Danish newspaper Jyllands-Posten has apologized for offending Muslims, but stood by its decision to print the 12 cartoons Sept. 30, citing freedom of speech. Kuwaitis have protested peacefully, but Danish and other European missions in Syria, Lebanon, Libya, Iran, Turkey, Indonesia and Nigeria have been attacked.
For KDD, the loss of sales would only be the beginning of its costs should it decide to change the company name. Right now, Jaafar said, KDD has on hand a six-month supply of packaging for 160 different products, including milk, butter, juices and tomato paste.
He said it would cost $15,000 each just to change package printing plates -- what he termed a $2.4 million "nightmare."
Jaafar has a team of KDD staffers searching Web sites that urge Muslims to boycott Danish products. If the KDD name is listed, the company writes the Web site asking that its name be removed from the boycott lists, some of which have been widely disseminated at mosques throughout the Islamic world. At least one such list declares that Muslims who spread it will be rewarded by God.
"In the first days, we (Muslims) were worked up and emotional," Jaafar said. "But now the time has come for using reason, and realizing that our behavior is harming national industries."
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