Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Guardian - UK
The Guardian - UK
World
Mark Tran

Bad news for Danish goods


Plastic bricks being manufactured at a moulding plant in Billund, Denmark, which makes 70% of Lego pieces. Photograph: Reuters

Some Danish firms are already reeling from a consumer boycott of their goods in the Arab world following the furore over cartoons of the prophet Muhammad.

Arla Foods, Europe's second-largest dairy products company, says the boycott of Danish products across the Middle East has been a disaster for the firm.

"We have built up our business over the past 40 years," the company said. "And within five days, our business came to a complete stop."

The Danish toy-maker Lego says its products have already been taken off the shelves of stores in Qatar, Kuwait and the United Arab Emirates.

Calls for a boycott are spreading.

Iran this week said it would cut all trade ties to Denmark, which exports some $280m (£160.9m) worth of goods to Iran each year. Bahrain's parliament also urged all Arab countries to boycott Denmark.

One thinktank has run through the numbers as to the possible impact of an Arab boycott. The Centre for Economics and Business Research looked at Danish exports to 39 Islamic countries.

In the year to October 2005, exports amounted to 11.8bn Danish kroner (£1.1bn) or 2.4% of Danish exports of goods. That is equivalent to 0.5% of Danish GDP. In the worst case, Danish GDP might drop by that amount if Danish exports to these countries disappeared completely for a year.

But Arab countries that have jumped on the boycott bandwagon may well suffer consequences as well. Danish tourists can be expected to give the Middle East a wide berth for a while. Danish tour operators have already cancelled trips to Egypt, Morocco and Tunisia following warnings by Denmark's foreign ministry for its citizens to avoid Muslim countries. Other Europeans might feel the same way too.

Moreover, the EU has warned that it will take Saudi Arabia to the World Trade Organisation if the Riyadh government supports a boycott of Danish goods. Cool heads are needed to avert unanticipated economic consequences.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.