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Thu 16 May 2002 04:00 AM

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Boycott affects American brands

Amidst the deteriorating Israeli-Palestinian situation, anti-American sentiment has now given rise to grassroots calls for a boycott of US products in the Middle East.

Amidst the deteriorating Israeli-Palestinian situation, anti-American sentiment has now given rise to grassroots calls for a boycott of US products in the Middle East.No one appears to have escaped the momentum of the boycott campaign, not even Starbucks, which was named by Business Week as one of the most valuable brands in the world.The company, which prides itself on having created the third place concept for people to go and experience unique coffee beverages has also run into trouble after its former CEO and current global strategist, Howard Schultz, made statements about the Israeli-Palestinian conflict.Responding to allegations by some critics that local businesses subsidise their American mother companies, Mohammed Alshaya, chairman of M.H. Alshaya, regional Starbucks licensee, told ITP.net, “We pay 4% in royalties but at the same time we pay 40% of our costs to the Arab community.” Alshaya adds, “Starbucks in the Middle East is 100% Arab, our products are from Muslim and African countries, our milk and food is local, and approximately 500 Arab employees have their salaries paid from these activities.” Alshaya points out that none of the products are American and that the arrangement with Starbucks is one of licensee and that even the coffee brewing machines are from Italy. “I am bringing know-how that helps create a business and trains employees from Jordan, Lebanon, Egypt and these people also help their weak economies,” says Alshaya. Certain areas where Starbucks operates in the Middle East have been affected, but Alshaya declined to provide figures and maintained that he does not attribute the nominal decline to recent events.

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