Dollar in doldrums

Sunil K Poolani

An Egyptian girl, accompanying her mother to a marketplace in downtown Cairo, said she was feeling hungry. She pointed out to a McDonald’s outlet and told her mother she would love a burger. The mother told her: “Don’t eat that stuff; it’s American.” The kid snapped: “Then how come it tastes so good?”

Come to Mumbai. Escaping from a sweltering sun, a Muslim cleric got into a flee-ridden hotel in the city’s bustling Mohammedali Road and demanded a Coke to quench his thirst. The hotel owner shouted at him in chaste Urdu: “Don’t you know it is haram (profane) to drink this enemy’s drink; don’t you know our brothers in Iraq are being killed by the makers of this filthy water. Have lime juice instead.”

Be it Cairo or Coimbatore, goods of capitalism, as American products like Coca-Cola, Pepsi and McDonald’s are euphemistically called, are the first casualty when the US and its allies go to war against a Muslim country, or when communists clamour against American imperialism or when the Vishwa Hindu Parishad or the Shiv Sena wants to fight against Western cultural hegemony.

American companies had seen it all and had withstood it over the years, with some success. But now things have gone for a toss. Come Iraq War II, and not just Asian, African and Latin American countries but nations like Germany and France, considered America’s and Britain’s close allies till recently, are not entertaining American goods. Most commercial establishments in these western European countries have banned not just eatables and drinks of American and British origin but cigarette brands like Marlboro and Camel, and products by HJ Heinz Co and Xerox. The list is endless.

So, are US manufacturers lying down and facing the wrath? Maybe not. In markets from Egypt and Argentina to Europe, US companies are plotting strategy, usually focusing on how to emphasise their ties to local communities and economies. McDonald’s in Argentina countered protests with a national newspaper campaign showing a Big Mac with the words ‘Made in Argentina’ stamped in bold, black letters. The ad explained that McDonald’s is a local company employing more than 10,000 Argentines.

P&G’s German headquarters in Swalbach receives five or 10 letters a day from consumers calling for a boycott of US products. Each gets a personal reply. “We explain that our products are mostly manufactured in Germany and that the boycott is dangerous for jobs,” a P&G spokesman said. “However, we are afraid that this is only the beginning, and that the boycott may become much bigger the longer the war lasts.”

Are the tactics working? Even Americans think otherwise. “Coke and Pepsi have had a hegemony in the world but thank God for an MBA President like George W Bush, we’re all about to enter a new realm of competitive marketing like we never know before,” wrote an American columnist.

It would be interesting to look at the damages. Though figures are not available since the war broke out, a month ago, some US companies were already reporting a drop in sales of between 25 and 40 per cent. Targets include McDonald’s and Burger King, Tide and Ariel detergents, Pampers nappies, Coca-Cola and Pepsi, Marlboro cigarettes, Hasbro toys, L’Oréal, Johnson & Johnson, Timberland, Starbucks and Heinz.

One of the main reasons behind the drop in sales in Arab countries has been the goading of clerics who, at Friday prayers, have named and denounced some of America’s most famous brands; Leaflets have been handed out on the streets, and the Internet has been inundated with protests. The Americans need to go a long way to tackle this strategy.

The news emanating from the Middle East is both interesting and entertaining. Factories in Iran making Zam Zam Cola are struggling to keep up with demand for their sweeter version of Pepsi and Coca-Cola. In the United Arab Emirates, sales of the local Star Cola have soared. The greatest hit, though, seems to be Mecca Cola.

Two of the six McDonald’s franchises in Jordan have closed for lack of business and KFC and McDonald’s branches in the Omani capital Muscat said sales had fallen by up to 65 per cent. This was before the war. In Riyadh, Saudi Arabia, preacher Sheikh Omar bin Saeed al-Badna has preached that the boycott would be good for the kingdom’s local economy.

In Beirut, students have protested outside the city’s four Starbucks shops, with leaflets spelling out the pro-Israeli sentiments of its chief executive, Howard Shultz, and claiming he is “an active Zionist.” In Morocco, the newspapers L'Economiste and Assabah have launched a campaign against the US dollar, urging Moroccans to avoid using the currency in their business dealings and opt for the euro wherever possible.

So far, McDonald’s is the most visible target, since the fast-food retailer has outlets that can be picketed or attacked. In the last two weeks, images flew around the world of protestors burning a Ronald McDonald figure in Ecuador and pointing a toy gun in his face in Indonesia, smashing McDonald’s windows in France and attacking an outlet in Spain. In Korea, a gun-toting demonstrator who scaled the Golden Arches wore a George Bush mask. “We have 30,000 restaurants around the world and a handful of those have received demonstration attention,” a McDonald’s spokesman said. “Nothing serious has happened at our restaurants.” Wishful thinking?

Why go all over the world? Come to India, go to Kerala. An antiwar group there has called for a boycott of products Coca-Cola, Pepsi and Unilever subsidiary Hindustan Lever from this month to protest against the US-UK military action inIraq. And the protest, you guessed it right, is spearheaded by the communists.