ALBAWABA - Nestle CEO Mark Schneider has discussed the apparent consumer boycott of Western brands in the Middle East in response to recent events in the region.
Schneider's comments followed the release of the company's annual financial results, which prompted an analysis of how the regional developments affected the market dynamics.
He said, "Since the tragic events of October 7th in the Middle East and certain Asian countries, there has been a discernible hesitation among consumers, particularly when it comes to embracing global and Western brands."
Schneider stressed that rather than being directly directed at their organization, this issue seems to be a part of a larger global trend. He observed that this change in customer perception seemed to be helping small companies in the area.
The CEO indicated that he expected this tendency to continue, indicating the necessity for further monitoring in order to assess the trend's changing significance throughout the course of the year.
According to Nestle's financial report, the company's sales decreased 1.5% in 2017 to 93 billion Swiss francs ($106.2 billion), partially attributable to rising food prices. Prior to this, analysts had predicted that sales would total 93.68 billion Swiss francs.
International businesses that expressed support for Israel's military operations in Gaza and gave help have come under increasing pressure from boycotts and protests around the world.
US food giants like McDonald's, Pizza Hut, and KFC, along with coffee giant Starbucks, as well as European multinationals Unilever and Nestle, are among the Western companies targeted in these efforts.
The financial records of these corporations showed the consequences as tensions in the Middle East increased. For example, McDonald's and Starbucks released financial results that were below what the market had anticipated.
In the final quarter of the previous year, McDonald's reported a drop in revenues in the Middle East, while officials at Starbucks emphasized a significant impact on consumer traffic and sales in Gaza-affected areas.
Similar to this, Yum! Brands, the company that owns Taco Bell, KFC, and Pizza Hut, reported lower-than-expected revenue for the same time. In the Middle East, KFC's sales decreased by 5%, while Pizza Hut's sales decreased by 3%.
A decrease in sales was observed by UK-based consumer goods company Unilever in Indonesia during the fourth quarter, which was ascribed to the boycott of international brands due to the geopolitical unrest in the Middle East.
