KUALA LUMPUR: Public-listed companies’ (PLCs) financial gains and shareholder returns will be significantly impacted if the public persists in boycotting their products and services over geopolitical concerns.
Former Minority Shareholders Watch Group chief executive officer Devanesan Evason said such knee-jerk reactions by boycotting products do not give PLCs confidence in securing new ventures, franchises, or contracts.
“Reduced dividends will result in lower shareholders’ profits and share prices. Conversely, losses without dividends could result in even lower share prices.
“The company should have conducted a media blitz to clearly communicate to all consumers that it is a Malaysian-owned company with no foreign shareholdings and that Malaysians will suffer due to the boycott.
“This should have been communicated clearly and unequivocally and not said in passing,” Devanesan told The Exchange Asia.
He was responding to a news article on Berjaya Corporation Bhd founder and advisor Tan Sri Vincent Tan Chee Yioun urging Malaysians to end the Starbucks Malaysia boycott.
Tan clarified in the article that Berjaya Food Bhd (BFood) locally owns the franchise and has an all-Malaysian workforce in both the head office and stores.
“As pointed out, the bulk of the employees are Malaysians, with about 80-85 per cent being Muslims.
“All these Malaysian workers will be impacted if there are store closures due to the boycott. Furthermore, it is a Malaysian-owned company that pays government taxes.
“There will be tax revenue loss. We are barking up the wrong tree, and the boycott will not have the desired outcome,” Devanesan said.
Apart from Starbucks, locals are also boycotting non-listed fast food chains McDonald’s and Burger King after a Reuters report on October 17 reported that their Israeli restaurants gave free meals to Israel Defense Forces (IDF) personnel.
Following that, Gerbang Alaf Restaurants Sdn Bhd, the franchise owner of McDonald’s in Malaysia, released statements clarifying its separation from the Israeli franchise.
The company emphasised that the Malaysian entity is entirely Muslim-owned and disclosed its donation of RM1 million to the Palestine Humanitarian Fund under the Prime Minister’s Department.
Devanesan said the media and the customer relations department could help persuade the public and consumers about the situation.
“Investor relations will also need to help assuage investors. They need to tell a good story, the right story, a convincing story,” he said.
Devanesan also said that governments must strike the right balance between politics and business.
He said relevant government agencies must be acutely aware of the unintended consequences of all government decisions and posturings.
“If a minister had clarified the Starbucks issue earlier, much hardship could have been avoided,” he said.
Further, Devanesan said multinationals must adopt an apolitical stance in running their business and need to send the message that they are doing business and distance themselves from being seen supporting unacceptable counterparties to the geopolitical tensions.
“Here, perception management is important. They must convincingly convey the message that Malaysians will suffer more because of the boycott and explain how and why,” he said.
The Malaysian International Chamber Of Commerce & Industry president Christina Tee said while acknowledging the challenges faced by some individuals impacted by recent boycott events, various industries are demonstrating a strong commitment to their workforce.
“Companies are actively seeking to re-hire these skilled and experienced workers, offering them opportunities and the necessary training for a smooth transition back into the workforce.
“This proactive approach signifies a collaborative effort with businesses and organisations to help individuals find new possibilities and succeed in their careers.
“This focus on re-training and redeployment signifies a positive shift within industries,” Christina told The Exchange Asia.
She said by investing in their workforce and offering opportunities for growth, companies are creating a more resilient and adaptable talent pool.
This collaborative approach ensures that skilled individuals can find new opportunities despite the current situation, ultimately benefiting both the workers and the industry as a whole, she said.
