Arla Foods set for Saudi Arabian return

Arla Foods is preparing to rebuild its business in Saudi Arabia after leading supermarket groups said they will begin selling its products in May.

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By  Roger Field Published  April 6, 2006

Danish dairy producer Arla Foods is preparing to restart business in Saudi Arabia after leading supermarket groups agreed to begin selling the company’s products by May. The breakthrough follows a multi-pronged PR campaign by Arla to dissociate itself from the blasphemous caricatures of the Prophet Mohammed (PBUH) that sparked the boycott of Danish goods back in January. The campaign started about two weeks ago when Arla ran a full-page statement in 25 Arab newspapers detailing its 40-year history in the Middle East and its disapproval of the caricatures. Arla re-iterated its message at the International Conference for Supporting the Prophet (ICSP), held in Bahrain in March. Muslim scholars at the conference recommended that Arla should be exempted from the boycott based on its condemnation of the blasphemous cartoons. Supermarket groups in Saudi Arabia finally agreed to begin selling Arla’s products again after a press conference held in Riyadh last Tuesday, which was attended by representatives from the country’s leading supermarket groups, as well as Muslim scholars from the ICSP. “Retailers in Saudi have agreed to take the products back and they have come with a common stand that they accept the statement from Arla Foods and accept the statement from the Muslim conference, which means [by May] we should be back on the shelves,” Laurent Ponty, Arla’s marketing manager for the UAE and Oman, told RNME. “We expect that when the retailers in Saudi have taken us back, the UAE retailers will follow. We are already back in some shops but not the biggest ones.” While Arla expects its sales to be significantly lower than before the consumer boycott started, it is optimistic that it can re-build its business in the region. “The first consumer signs are positive,” Ponty said. “The way people perceive our products has not changed. People are maybe starting to understand that we are innocent in this issue. We are positive and wait for the next developments.” Arla estimates that it has lost some US$1.5 million a day since the boycott of Danish products started on January 28.

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