Published on 22 August 2018

CSR

[Inside story] Danone boycott in morocco: five lessons to draw from the crisis

Since 20 April, three companies have been the target of a boycott of unprecedented scale in Morocco: Sidi Ali mineral water, Afriquia gas stations and Danone dairy products. According to supporters of the movement, these three companies offer commodities that are too expensive, operate in a virtual monopoly and are too closely linked with the government.

Employees of Morocco’s Centrale Danone protest in front of the Parliament in Rabat.
@FadelSenna/AFP

A boycott of several companies has been organized in Morocco for almost four months now. Three are mainly targeted: Sidi Ali, a producer of mineral water, Afriquia gas stations and Danone with its brand of milk. Initially, there was massive citizen mobilisation, which began on 20 April, due to a viral campaign diffused on social media networks.

The campaign denounced the high price of these basic products. What’s more, this protest took a political turn by denouncing collusion between big business and the government. The difficulty and duration of this mobilisation is a case study that provides lessons for societies when they face large-scale movements.

1 - Assume a political and societal role

As influential economic actors on the territory in which they reside, companies are increasingly assuming a political role by contributing to society. "Danone is threatened in Morocco not because it committed fault or sold damaged milk, but because it has been targeted by a global protest for purchasing power, for reasons that go far beyond the company and its products," suggests consultant Clara Paul-Zemmour in an address published in Le Monde newspaper (1).

This is a local example that illustrates a global trend, as explained by expert in Corporate Social Responsibility (CSR) Patrick Humières (2). "The company has become a geopolitical actor in its own right, given their weight - [multinationals] are sometimes more powerful than states - and with the regulatory challenges of globalisation, global affairs have become the business of the company ".

2 – Consider consumers as a stakeholder

The speed and scope of this "socio-economic mobilisation", as Moroccan political scientist Mohammed Madani calls it, proves once again that consumers/citizens have become company stakeholders. And they are increasingly demanding information on CSR and the products they consume. These new players no longer hesitate to take retaliatory measures if they feel unsatisfied.

3 – Exemplify CSR communication locally

It was not until 26 June that Danone's CEO, Emmanuel Faber, went to Morocco to "listen and understand the reasons behind this boycott from people on the ground". In the meantime, the group's discretion on the subject increased the public’s dissatisfaction. This misunderstanding is even more significant because the group strongly focuses its communication on social responsibility, highlighting its shared value, its partnerships with breeders and its desire to reconcile profits with positive contribution to society.

4 - Anticipate the impact of decisions on the local economy

 Within a few weeks of the boycott, the turnover for Danone’s Moroccan subsidiary plunged 50% with a net loss of €13.5 million for the first half of the year. The blow is hard for the company, and it also has repercussions for its entire ecosystem via its supply chain. Centrale Danone employs 6,000 people in Morocco. Given the scale of the boycott, the Centrale reduced its milk production by 30%, to 120,000 local farmers, and did not renew its contract with more than 880 temporary workers. As a result, these workers demonstrated in front of the national parliament against a boycott that is "threatening their employment".

5 - Reinvent a positive impact economic model

The Moroccan boycott echoes the reflection around the world concerning the economic models of large companies. While stressing that the price of its pasteurised milk Centrale had not increased for 5 years, Danone decided to propose the "co-construction of a new model to meet the expectations of Moroccan society", inspired by new business model trends.

This model would be based on three commitments: selling fresh pasteurised milk at the delivered price; committing to full transparency on price allocation; and "trusting grocers and consumers to decide together what a 'fair price' should be." This is a work in progress, according to Danone.

Béatrice Héraud @beatriceheraud

 

(1)    The address by Clara Paul-Zemmour in Le Monde


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