Économie et Finance

Danone and the boycott, who is being made a fool of?

le 18 juin 2018

Centrale Danone’ announcement that it had adopted drastic interim measures to deal with the devastating effects of the boycott campaign, launched on 20th April, has provoked extensive coverage, which, in most cases, is favourable to the company.

The press, particularly the French-speaking press, has highlighted the extent of the damage caused by the boycott and the social and economic consequences of this campaign, which is clearly unjust, as far the three major brands are concerned.

For Centrale Danone, the consequences of this boycott include having to lay-off 886 temporary workers and reduce by 30% the volume of milk collected from the tens of thousands of (mostly small) farmers who supply the country’s main milk distributor on a daily basis.

Although it is obvious that the (anonymous?) perpetrators of this boycott campaign are guilty of social and economic crimes and must therefore assume entire responsibility for the consequences of their actions, Centrale Danone’s official reaction cannot leave one indifferent.

Left high and dry                   

This is because its approach would appear to be as inappropriate as it is credible. And for many reasons.

Making nearly a thousand of its employees redundant, temporary employees moreover whose lives are precarious, in the middle of the month of Ramadan, is simply inacceptable, socially as well as politically!

Leaving hundreds of employees high and dry, overnight, without informing the public authorities, the Ministry of Employment or senior members of the government, is inacceptable and would be totally unthinkable in other parts of the world.

Would Danone, for example, be able to behave in this way in France today?

Assuming responsibility, also, for depriving tens of thousands of its suppliers, small-hold and livestock farmers for the most part, of one third of their income, is also a major scandal perpetrated by a company which happens to be a subsidiary of a multinational enterprise with global commitments!

Has Centrale Danone’ local management really taken on board the social consequences of this lockout and the future of the many families in Morocco’s rural regions who, as a result, will now be obliged to throw away one-third of their milk production, rapidly get rid of their cattle which have provided them with a regular income as well as incurring a significant loss of income?

In behaving in such a way, Centrale Danone, which is the country’s leading distributor and producer of dairy products and derivative products, has adopted a cavalier attitude with little regard for the economic and social realities of Morocco.

It would suggest that, in this particular case, the multinational’s local management has basically used the boycott as a pretext for implementing an austerity and cost-reduction plan.

One wonders whether, as we have been led to believe until now, Centrale Danone was actually a collateral victim of the boycott campaign against Sidi Ali and Afriquia…

It is highly probable that neither Mrs Miriem Bensalah nor Mr Aziz Akhannouch would have allowed themselves to behave in such a way, despite their brands and their very persons coming under attack from the boycotters.

Mergitur, nec fluctuat!!!

In addition to the untimely nature of these measures which smack of social and economic disengagement, Centrale Danone’s approach brings to mind a number of other factors.

This company, which is listed on the Casablanca Stock Exchange, emjoys a somewhat unique status, in that, since the sale of Centrale Danone by SNI to French shareholder Danone, the latter owns almost a 100% stake in its subsidiary.

The result is that Central Danone stock’s free float on the Casablanca Stock Exchange is almost non-existent!

Perhaps it was for such ‘good’ reasons that local management again chose to ignore the legal prescriptions because, when alluding to the various difficulties encountered as a result of the boycott, it chose not to issue a profit warning, which would have in any case been somewhat pointless since Centrale Danone is (almost) the only shareholder in… Centrale Danone!

Lastly, how much credit should be given to the arguments and reasons put forward by Danone’s local management which, despite announcing a new communications policy designed to closer ties and empathy with Moroccan consumers, is adopting a rather narrow and highly selective approach? A French-only communications medium via our peer publication, L’Économiste, its radio alter ego, Atlantic Radio as well as Media 24, a French-only website constitutes its entire communications strategy, targeting 35 million Moroccans…

Was local management really targeting the millions of disoriented consumers, the thousands of families of those employees which had been made redundant and the tens of thousands of rural families deprived of one-third of their incomes by choosing these industry peers, or would it not have perhaps been better to have complied with the minimal union requirements regarding the French language which targets only the A and B+ socio-professional categories?

In this affair, Centrale Danone is not afraid of revealing its true nature, that of a colossus with feet of clay, which has behaved according to the idiom, ‘opportunity makes the thief’.

That is why the decisions should not be accepted by the public authorities and Centrale Danone should be held accountable to the government of Mr El Othmani who must now be prepared to take action…

(See page 11, Finance section, for Centrale Danone’s press release announcing its profit warning in respect of 2018 earnings)


Original article : https://lnt.ma/danone-boycott-de-se-moque-t-on/