Starbucks Malaysia faces long-term sales decline due to anti-Israel boycott

Businessman Vincent Tan once Malaysia‘s richest man grapples with decline in income Starbucks A chain reaction has formed as the pro-Palestinian boycott of the country’s coffee giant shows no signs of abating.

Malaysia’s largest bank, Maybank, has warned that the coffee brand could face a decline in sales in the long term due to entrenched consumer confidence.

Starbucks’ local licensee Berjaya Food Berhad (BFood) reported a pre-tax loss of 31.82 million ringgit (US$7.1 million) in its latest quarterly results; This marks the fourth consecutive quarter of losses. Revenue fell more than 50 percent year-on-year to 124.19 million ringgit (US$28 million), despite a booming coffee market.

The boycott was fueled by the perception of Western brands as professional.IsraelIt forced BFood to temporarily close more than 10 percent of its 400 branches. Starbucks has faced backlash primarily over its perceived affiliations United States and Israel, Boycott, Divestment and Sanctions, although it has not been officially blacklisted by Malaysia.

More than 41,500 Palestinians have been killed in Gaza since the beginning of the war. warThere are nearly 100,000 injured, Médecins Sans Frontières reported Thursday. Approximately 1,200 Israelis were killed in the Hamas attack that sparked the conflict 13 months ago.

Photo of Malaysian businessman Vincent Tan in 2013. Photo: Reuters

Despite BFood’s claim that it is a local business employing more than 5,000 Malaysians, consumers are diverting their spending elsewhere. Maybank estimates that BFood’s losses could rise to 65 million ringgit (US$14.5 million) this year, while profit expectations will fall by up to 15 percent for the next two years.

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