Woolworths counts the boycott cost

2014-11-23 15:00

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Activists and shareholders are scheduled to protest against retailer’s Israeli suppliers at annual general meeting

The South African Boycott Divestment and Sanctions (BDS) campaign will send dozens of activists to Woolworths’ annual general meeting in Cape Town on Wednesday, together with a few existing shareholders who support its campaign, to get the retailer to cut ties with Israeli suppliers.

Everyone involved freely admits Woolworths’ trade in Israeli goods is minuscule. South Africa as a whole imports very little from Israel, and exports mainly diamonds and some coal to that country.

According to BDS national coordinator Muhammed Desai, it doesn’t really matter how many vegetables from Israel Woolworths is stocking on any given day.

“We looked at all South African retailers. Most have Israeli links that are small and inconsequential. We chose Woolworths because of its ethical image,” he said.

Some shareholder activists are couching the issue in terms of brand equity and Woolworths’ carefully constructed image as a “responsible” company.

Having very successfully created this persona for itself under the banner of the “Good Business Journey” is precisely why Woolworths, and none of the larger retailers, has been targeted, says Nadia Hassan, who will go to the general meeting as a representative of “a group of senior black businessmen who hold shares in Woolworths”.

Any complicity, however small, in legitimising Israel’s policies and actions must be contrary to international codes of good governance like the UN Global Compact, to which Woolworths is a signatory, says Hassan.

While Woolworths doesn’t have very strong links with Israel, it could face disproportionate commercial repercussions if it publicly renounced Israeli produce, at least if claims recently made in court by Continental Outdoor Media are reliable.

Continental recently ended up in court after pulling down a paid-for billboard ad by BDS – allegedly due to pressure from the Jewish community.

It claimed in court that it stood to lose R300?million in business if it did not pull down the billboard, although that claim was not substantiated or explained.

The billboard showed a well-known illustration of the encroachment of Israel on former Palestinian land from 1946 to 2012.

Continental lost the case after trying to defend pulling down the ad because it might offend religious sensitivities, among other things.

The current campaign centred on Woolworths took off during Israel’s so-called Operation Protective Edge in July and August this year.

During the operation, about 2?200 Palestinians in Gaza, as well as 65 Israeli soldiers and four Israeli civilians, were killed.

During the bombardment of Gaza, South African Jewish and zionist organisations organised a large rally in support of Israel in Johannesburg, demonstrating that there is potentially a formidable organised resistance to anti-Israeli campaigns.

In numbers

Woolies trading update

Woolworths issued a trading update this week, announcing relatively solid overall growth in sales, but a weak performance in food sales, which it blames on inflation, not the boycott campaign.

The group’s sales in the 20 weeks to November 16 grew by 11.9%, or 49.5% if you include the Australian David Jones group Woolworths acquired in August.

The company’s food sales, however, seem to have stagnated, which could be attributed to the tough economic conditions as well as to the effect of the boycott campaign.

Food sales rose by 13.3%, but the price increase underpinning that was 9.3%, meaning volumes increased by about 4% compared with a year ago. That’s if you include new stores.

For the stores that already existed a year before, food sales grew by 7.9%, less than the overall price increases of Woolworths’ food division. This suggests that the stores were selling 1.4% less food.

“We’re not seeing the impact of any protests in our sales figures,” Woolworths said in response to questions.

The food sale numbers are instead blamed on inflation.

“People tend to shop to a budget rather than the number of items?...?The current economic outlook and the challenging trading conditions are also a factor,” said Woolworths.

The shareholders

All but one of the shareholders involved in the boycott have remained anonymous, but their representatives are not hiding the fact that they are few and have a minor stake in the company.

One who is going public is Stellenbosch-based writer Marthie Momberg.

Alan Horwitz, a local anti-zionist activist, will go to the annual general meeting to represent a group of unnamed Jewish Woolworths shareholders.

The plan is not to vote Woolworths into boycotting Israeli goods, but only to put direct questions about the issue to management in a forum where they cannot really evade them.

This followed Woolworths refusing to meet BDS organisers, said BDS national coordinator Muhammed Desai.

According to Desai, BDS has bought shares for about 25 of its members to attend the meeting.

Other organisations, including Cosatu, have done the same, making it likely that the BDS campaign will send up to 50 people to the meeting.

The day before the meeting, however, the South Gauteng High Court will hear Woolworths’ application for an interdict restraining BDS protests inside Woolworths stores.

The application, if granted, should have no effect on pickets outside stores.

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