November 5, 2002. Copyright 2002. Graphic News. All rights reserved.

Brand wars in the Middle East

LONDON, November 5, Graphic News: As the United States prepares to launch a war against Iraq, consumers across the Islamic world are protesting with a boycott of American and western goods.

During the past year business at western fast food and drinks firms has dropped by 40% and trade in American branded goods has shrunk by a quarter.

In Egypt, activists wants consumers to stop buying Procter & GambleÕs Ariel soap powder because, they say, it is named after IsraelÕs prime minister, Ariel Sharon. The self-appointed ÒEgyptian Committee for BoycottÓ argues that ArielÕs logo is really a Star of David. 

ÒItÕs ridiculousÓ, says P&G. ÒAriel was around long before the Israeli leader. Our logo represents an atomÕs path, not a religion.Ó P&G has spent $97 million on factories and community projects in Egypt -- building schools, financing health education and even paying for Muslims to go to Mecca -- but despite the multi-national corporationÕs protestations, sales of Ariel in Egypt are suffering. 

Across the Middle East, AmericaÕs war on terror, support for Israel, and threats to Iraq have inspired consumers to boycott American brands from Nike trainers and Heinz ketchup to Pampers nappies.

The most successful consumer strike is the ÒCoca-Cola war,Ó in which an Iranian soft drink named ÒZam Zam ColaÓ -- after the Zamzam holy spring in Mecca -- is replacing sales of Coke and Pepsi. PepsiCo blames the consumer protest for flattening its Middle East sales, and Coca-Cola, which is the second-biggest investor in Lebanon and Palestine, says it has lost up to 10% of its sales in the region.

Zam ZamÕs chairman, Ahmad Taheri, said drink products have reached new export levels in the Arab and Muslim regions, with sales of 2.5 billion cans over the last year. He said the success of the drinks was Òlargely due to Arab and Muslim consumersÕ boycott of American products, which affected soft drinks that carry U.S.-made trademarks.Ó

Zam Zam, which employs some 7,800 people in 16 factories in Iran, has an annual turnover of $162 million. Although dwarfed by Coca-ColaÕs $18 billion, its success has encouraged other indigenous drink products. Sales of Palestinian-produced Star Cola have risen by 40% in the past three months in the United Arab Emirates, and French Muslim entrepeneur Tawfic Mathlouthi plans to sell his Mecca Cola in Paris, with Ò10 percent of the profits going to a Palestinian childrenÕs charity.Ó

In Saudi Arabia, fast food chains KFC and Burger King report a 50% drop in sales over the last year, while U.S. giant McDonaldÕs plans to close two of its six outlets in Jordan; its restaurants have been attacked in Lebanon, Oman, Bahrain, Cairo and Qatar.

The protests extend beyond U.S. products. Demonstrators have targeted Mercedes dealerships in the Jordanian capital Amman, and shoppers are being encouraged to turn away from major European brands such as LÕOrŽal cosmetics and NestlŽ during the holy month of Ramadan.
/ENDS

Sources: The Economist, Associated Press, UPI, Reuters