ZCZC
BCN-16
FRANCE-FOOD-EARNINGS
Danone’s profits curdled by Morocco boycott
PARIS, Feb 19, 2019 (BSS/AFP) – A consumer boycott on Danone products in
Morocco contributed to the French food giant’s profits and sales sinking last
year, it said Tuesday.
The world’s largest yoghurt maker said in a statement that its net profit
fell by 4.1 percent to 2.35 billion euros ($2.65 billion) in 2018.
Sales dropped by 2.1 percent in the last three months of the year, driven
by a 35 percent plunge in Morocco, where there has been unprecedented boycott
campaign over high prices against Danone milk and two other well-known brands
since April.
The boycott’s impact in 2018 “on total net sales was a decrease of -178
million euros (-$201 million) versus 2017 net sales, of which around two
thirds come from losses in milk sales, and one third from losses in dairy
products,” the company said in a statement.
Chief financial officer Cecile Cabanis said in a conference call that there
was still a market share for Danone’s products in Morocco, but she did not
expect to return to growth there before the end of 2019.
The boycott campaign against the high cost of living in Morocco spread like
wildfire online last year, calling on Danone milk, Afriquia service stations
and Sidi Ali water — the leaders in their sectors — to lower their prices.
Despite the boycott, the company said its full-year reported sales were
down just 0.7 percent
It benefited from sales of dairy products stabilising in Europe, growing
strongly in the CIS region that includes most ex-Soviet countries and also
improving in Latin America.
In North America, sales in the “essential dairy and plant-based” food
products division surged by 12.2 percent to five billion euros.
Sales of infant formula products fell in China, but Cabanis said the
decline was slowing, dropping from 20 percent in the third quarter to 10
percent in the fourth.
Looking ahead to the current year, Danone is aiming for like-for-like sales
growth of three percent and an operating margin above 15 percent.
Following the announcement, the company’s share price bumped upwards by 0.3
percent in morning trading in Paris.
BSS/AFP/SR/1910 HRS