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Retailers, suppliers wary of deeper sales decline amid Israel boycott calls

Jakarta Post - November 17, 2023

Deni Ghifari, Jakarta – Retailers have started to feel the pinch from a call to boycott pro-Israel products with firms wary that it could lead to a bigger jolt to businesses unless the government intervenes, associations said on Wednesday.

The Indonesian Retailer Businessmen Association (Aprindo) said in a press briefing on Wednesday that firms have started to see between 3 and 4 percent decline in daily sales over the past week when the call was made official by Indonesia's top Islamic scholars' body.

Aprindo chairman Roy Mandey said the impact could be bigger in the following weeks, pointing out that the real ramifications of the boycott would be seen a month after the fatwa issuance.

"Choosing, buying and consuming are consumers' rights, peoples' rights, and they need to be protected, their rights need to be guarded," Roy said.

He also warned that businesses may end up laying off employees if the boycott expands.

The Indonesian Ulema Council (MUI) issued Fatwa No. 83/2023 on the Law of Supporting Palestine, underscoring the obligation to support Palestine and boycott pro-Israel products on Nov. 9.

Issued as a form of the MUI's scholarly responsibility, the fatwa follows the emerging worldwide campaign calling for boycotts of Western brands that have been accused of supporting Israel.

The fatwa, however, did not contain any list of the brands or products that should be boycotted.

Indonesian Modern Market Supplier Association (AP3MI) secretary general Uswati Leman Sudi said in the same press briefing that the impact of the boycott had not materialized yet in the supplier's side, emphasizing that it may take slightly longer for them to feel the impacts.

"If [the boycott] persists, [...] it might affect 50 percent [of sales]," said Uswati.

She emphasized that the boycott may affect fast-moving consumer goods (FMCG), which have a significant contribution to profit margins despite comprising only a part of the product category.

Trade Minister Zulkifli Hasan responded that the government would leave the public to decide whether to boycott pro-Israel products, implying that it wouldn't intervene in the matter.

"That is up to the people, but will that help? Go ahead," the minister was quoted as saying, according to a press statement released by the Trade Ministry on Nov. 9.

The Industry Ministry, meanwhile, said on Nov. 3 that it is in no position to support or reject the boycott.

Certain brands like PT Unilever Indonesia and Starbucks' franchise holder in Indonesia PT MAP Boga Adiperkasa, have seen their stocks, which are traded on the Indonesia Stock Exchange (IDX), face pressure amid boycott calls.

It was reported that many Indonesians began boycotting McDonald's and other businesses in the city of Medan, North Sumatra in October, after McDonald's Israel announced on social media that it had provided free meals to the Israeli military, according to Al Jazeera.

Source: https://asianews.network/retailers-suppliers-wary-of-deeper-sales-decline-amid-israel-boycott-calls