Rabat - According to the latest figures, the boycott has negatively impacted the earnings of the companies it targeted.
Rabat – According to the latest figures, the boycott has negatively impacted the earnings of the companies it targeted.
The boycott, launched on April 20, targeted three companies with large market shares for high prices in the Moroccan market: Sidi Ali, Centrale Danone, and Afriquia Gaz.
Significant financial loss for Centrale Danone
The main actor in the Moroccan dairy sector, Centrale Danone, experienced the largest loss. The company suffered a net loss of MAD 115 million in the first half of 2018 in comparison to a net gain of MAD 56 million during the same period in 2017.
The dairy company found itself forced, in the face of angry boycotters, to reduce the quantity of milk it purchased from farmers and release more than 800 employees working under interim contracts.
The company broke its silence less than two weeks into the boycott and launched consulting campaigns with consumers in Casablanca, Marrakech, Rabat, Meknes, and Agadir, to collect proposals from consumers in order to find a compromise on a price for milk. The campaigns ended by reducing the price of 1 liter of milk from MAD 7 to MAD 6.40 to satisfy and meet the purchasing power of consumers.
Centrale Danone is a subsidiary of the multinational French company Danone, managed by Emmanuel Faber. Faber visited Morocco in the midst of the boycott to attempt to reconcile with consumers.
Sidi Ali’s sales drop by 87%
Oulmes Mineral Water, known for its subsidiary Sidi Ali, has netted only MAD 9.74 million in the first half of 2018, down 87 percent from net earnings in the first half of 2017.
A dominating shareholder of the bottled water market with 72 percent of the market, Sidi Ali attributed its high prices to the government’s high taxes. Sidi Ali said it paid MAD 657,072,912 in taxes, which includes VAT, water resource utilization fee, a local domestic consumption tax, the environmental tax and tax mark fees. The 2017 tax burden represented an increase of 9.8 percent in comparison to 2016.
The tax paid to the Oulmes locality was MAD 99,056,958, while the water abstraction fee was MAD 48,288,916.
Oulmes pointed out that Sidi Ali’s profit margin, after deducting all expenses, is 7 percent, or MAD 0.40 per liter.
According to the company’s data, released in fiscal year 2017, its profits exceeded 195 million, a growth of 16 percent compared to 2016, which generated MAD 165 million in profits.
The former president of the General Confederation of Enterprises of Morocco (CGEM), Miriem Bensaleh-Chaqroun, owns Oulmes Mineral Water company and its subsidiaries, Sidi Ali; Ait Atlas; Bahia; and carbonated water, Oulmes. The company distributes its products in the Middle East, Africa, and Europe.
Afriquia Gaz continues it’s silence
Afriquia Gaz’s net profits are not available, as the company is not on the stock market and not responsible to release any financial data.
Afriquia Gaz and other fuel companies have raised their profit margin since the liberalization of fuel prices in December 2015 under Abdelilah Benkirane’s government.
An MP in the Federation of the Democratic Left (FGD), Omar Balafrej, strongly criticized national fuel companies and called for the government to retrieve the amount that customers paid above the previously regulated price since liberalization.
The minister of agriculture and fisheries, Aziz Akhannouch, owns Afriquia Gaz, which is part of the holding group, Akwa Group, founded by Akhannouch’s father. Akhannouch strongly defended Centrale Danone during the boycott but did not speak out about his own company.
The Moroccan government, under Head of Government Saad Eddine El Othmani, said that the boycott would discourage foreign investors.
Official data show that during the period of August 2017-2018, foreign direct investments fell to MAD 14.6 million, according to El Othmani.
The boycott has raised calls to set a cap on fuel, dairy, and mineral water prices to meet Moroccans’ purchasing power and reactivate the regulatory body to open the field for competition and combat companies with large market shares.