World: Danish Businesses Count The Cost Of Cartoon Dispute

Demonstators in Lebanon burn a police car outside the Danish consulate, 5 February (epa) Danish businesses see years of work destroyed as the boycott of Danish products spreads across the Muslim world.

PRAGUE, 7 February 2007 (RFE/RL) -- The destruction of the Danish embassies in Damascus and Beirut in recent days has made for dramatic television footage. But the real damage to Danish interests may be far more costly, if far less spectacular.

Astrid Gade Nielsen, the spokeswoman for Denmark's Arla Foods, the second-largest dairy-products firm in Europe, says the boycott of Danish products across the Middle East has been a disaster for her firm.

"We have built up our business over the past 40 years," she says. "And within five days, our business came to a complete stop."

Arla sells products worth $500 million a year in the Muslim world, mostly butter and cheeses. "It is a substantial amount of our sales," she says, but "more importantly, the Middle East is a strategic area for Arla Foods, and we have just recently decided to invest in a further expansion of our business there."

Now, though, "we sell no products whatsoever in any country in the Middle East."

In a further escalation, Tehran on 6 February announced that it is cutting all trade ties to Denmark, which exports some $280 million worth of goods to Iran each year. In addition, Bahrain's parliament on 6 February urged all Arab countries to boycott Denmark.

Tehran's move will not affect Arla, which does not operate in Iran. But other Danish executives fear the cartoon row could morph into an all-out war against Danish businesses.

Charlotte Simonsen, the spokeswoman for the Danish toy-maker Lego, says Lego's products have already been taken off the shelves of stores in Qatar, Kuwait, and the United Arab Emirates.

She said that Danish firms are "of course" concerned about the boycott, "but the violence, and the loss of lives right now, is very much in the minds of people."

For Anne Villemoes, the spokeswoman for Danish Crown, which exports chicken to the Middle East, "the main concern is a situation where we see how different cultures react to different things. And that means that we as a company now have chosen to sort of hold our breath and wait for a diplomatic solution."

That may be some time in coming, as some analysts say it remains unclear to what extent some governments may be encouraging the protests for their own political ends.

Neil Partrick, a Middle East analyst with the Economic Intelligence Unit in London, says "the whole issue has presented an opportunity for a number of governments in the region to try and deflect pressure in a number of ways. There has been this very strong suggestion, for example, that the Syrian government may have been doing something similar."

Partrick was referring to accusations by U.S. officials that the Syrian authorities effectively allowed protesters to attack the Danish Embassy in Damascus in order to divert international attention away from Syria's alleged complicity in the murder of the former Lebanese prime minister Rafik Hariri. Syria is currently under intense pressure to cooperate with the United Nations' investigation into Hariri's assassination in February 2005.

Partrick says Iran too may want to use the cartoon row, in its case in order to weaken the international focus on its controversial nuclear program, which the West suspects is aimed at developing nuclear weapons.

Crowds in Tehran on 6 February pelted Denmark's diplomatic mission with petrol bombs and rocks, and a small group tried to break into the building before being stopped by police.

But, says Partrick, "it isn't just about international relations, of course; it's also about an internal context."

There is, he believes, "genuine grassroots anger. And the governments say to themselves, 'Do we really want to be seen to be in a position where we're using violence against people protesting something which the great mass of their people feel very strongly about?'"

That anger against Denmark and the growing number of Western countries whose newspapers have reprinted the cartoon resulted on 7 February in more clashes.

In Afghanistan, as many as four people were reported killed when demonstrators stormed a base in the northwestern town of Maymana that housed a contingent of Norwegian soldiers serving with the NATO-led International Security Assistance Force. The cartoons have also appeared in a Norwegian publication.