Brands and Boycotts in the Middle East

A relatively modern phenomena that has been taking place in the Middle East and North Africa has been the rise of boycotts of some brand names. Boycotts are often a form of economic protest against brands, which are perceived to represent an enemy or its economy.
Probably the most enduring boycott has been of brands which are closely linked with Israel and the perceived threat of Zionism. Various institutional boycotts of Israel have been reinforced by Arab nations since 1922, and with a more comprehensive boycott by the Arab League in 1945.
However, since the last 30 years these government imposed boycotts have weakened in many countries and are even disappearing all together in some countries. Additional pressure has been put by the US government after passing its anti-boycott laws in 1977, an action especially spearheaded by the American Jewish Committee.
And yet even today boycotts of Israeli affiliated brands remain largely popular. Today, the Arab streets do not necessarily need political or legal measures to maintain boycotts, as it has now become a popular form of consumer activism. This has become even more widespread through the use of modern communication systems, especially through internet and social medias.

Boycotts often impact brands which have a strong perceived identification with political entities and countries, which are considered to be enemies. Besides having in the Arab world an anti-zionism connotation it has also an arab nationalist dimension, as well as a cultural-religious dimension to it. For example, after the infamous caricatures of Prophet Muhammad (peace be upon him) in Danish newspapers, several Danish brands and products faced boycott throughout the region and the Islamic world.
The impact of such boycotts is quite apparent. It means important loss in trade and economic benefits for corporations as well as to countries boycotting. Yet many people boycotting products are well aware of some loss in economic benefits or other material benefits, but they are willing to make such sacrifices for the sake of their principles.
Affected companies and nations react very differently to such boycott measures. For me, one wrong approach is to put legal and political pressure against popular institutional boycotts, such as measures taken by the USA against the anti-israeli boycott. Yet until today the situation has not improved a lot, on the contrary these boycotts are now been managed by the people in the Arab streets themselves. Furthermore with the changes taking place in Arab countries since the spring uprising, such boycott measures might even find new strength, especially in Egypt.
Other countries, such as in the above mentioned case of Denmark, the Danish government had been more proactive in many Arab countries with a PR campaign aimed at clarifying more clearly its position and the neutrality of Danish companies. Although Danish products were affected by the boycott, it has been far more limited than expected.
Affected companies themselves often react passively to such boycotts. This I believe is one the biggest mistakes. It is important to consider and study more clearly what brand perception one wants to communicate in the Middle East and North Africa. This should take into account the specific political and religious-cultural nature of the environment. Furthermore, there is a necessity to reconsider whether one is truly dedicated to realigning its brand image or not (i.e. Cost vs Benefit analysis). I believe that many companies that are active on the international market with their brands need to consider what impact their political affiliations would have on their business. It is especially important for companies which have consumer oriented brands to be perceived as being politically neutral.
Moreover, many companies can positively improve their image by committing themselves towards being more socially responsible within local communities and the region. It is important to have a corporate governance policy that genuinely displays a sense of social responsibility awareness and engagement.

Useful references:

• Website: Arab shoppers are abandoning western brands for local alternatives (The Economist, 31.10.2002), this is a very interesting article from The Economist, which illustrates well the huge impact of boycotts on brands.
• Book: "Brand Valued: How socially valued brands hold the key to a sustainable future and business success", a valuable book from Guy Champniss, that illustrates the point I made in my article about the importance of social value and responsibility of brands.