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Rabat – Following three weeks of silence from Moroccan government officials and executives of three boycotted Moroccan companies the government spokesperson has finally spoken out, singling out the dairy boycott in a shocking press conference, in which he threatened its boycotters.
The boycott is exposing great vulnerabilities in the communication strategies of the three affected companies, Centrale Danone and Eaux Minérales d’Oulmès (Sidi Ali), owned by Holmarcom, and AFRIQUIA GAZ, owned by the Akwa Group, which risk losing their market share. Until Government Spokesman Mustapha El Khalfi’s May 10 press conference, the government had not proposed any solution to the ongoing crisis.
El Khalfi said that “the government has carefully studied the price structure of the milk company, calculated different factors and their impacts on the national economy, and found out that profit margin is reasonably within 0.20 MAD/ Liter.”
He added that “the company didn’t increase its prices and that there was no disruption for the milk collection from the farmers.” The government spokesperson claimed that “the boycott in most part is based on false allegations that are spread by the boycott campaign,” which he considered “illegal and is not a freedom of speech” he added that the government will review the current speech laws.”
While Morocco’s economy is considered relatively liberal, governed by the laws of supply and demand, the boycott exposes aggressive government intervention to protect the interests of certain companies over others. Threatening unsatisfied consumers to end their boycott is not only an attempt to do the affected companies’ communication homework, but an offensive intervention against the liberal economic principles that Morocco has embraced for decades.
As the boycotted companies failed to open any proper communication channels with the angry consumers, they initially resorted to insulting the boycotters. Now they are threatening them via the government spokesperson.
What Mr. El Khalfi and those who he speaks for seem to forget is the basics of economic theories. Adam Smith’s invisible hand theory revolves around the fact that liberal free market economies are built on the promise that companies sell products and services that people want to buy. If they can meet the demands of their customers they will enjoy financial rewards. In free market economies, the “invisible hand” guides the actions of both sellers and buyers through supply and demand, naturally directing the market towards efficiency.
Today, in Morocco, instead of simply laws of supply and demand, the economy is also influenced by the government putting its thumb on the scale, distorting the market’s invisible hand. Such actions disrupt the notion of liberal economy by preventing smaller competitors from reaping the benefits of inefficiencies and mismanagement of the boycotted companies. As the failing companies lose their market shares and are forced out of the market, new smarter companies will emerge to meet the demands of the consumers by lowering their operating costs, increasing their profit margin without raising prices or compromising the quality of their products.
As the boycott in Morocco progresses, both corporate and government officials in Morocco have demonstrated unconcern for consumers and constituents alike. Continuously failing communication strategies have pointed out the flaws in crisis communication, mitigation and risk management on both corporate and cabinet levels.
An aggressive response to the boycott only spreads the message of the boycotters and exhibits the lack of foresight of these corporate and government officials in dealing with the boycott crisis.
The views expressed in this article are the author’s own and do not necessarily reflect Morocco World News’ editorial views.
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