ANT KATZ
A version of this article was published as the lead story in the SUNDAY TIMES BUSINESS TIMES on October 5 and in BUSNESS DAY on October 6.
Woolworths might haul the local affiliate of US-based NGO Boycott, Divest and Sanction (BDS) group into court because, the retailing giant says the activists’ threats have put the safety of staff and customers “at risk”.
“Our employees of all faiths and cultures, are telling us that they are feeling increasingly threatened by the protests. What’s more, the families of our employees have reported being abused and sworn at by BDS.
“If this continues we will consider taking further precautions, including legal action against the individuals involved,” spokesman Babs Dlamini said last week.
Main target
Woolworths has been the main target of BDS, a pro-Palestinian lobby group targeting companies doing business with Israel.
It is not known to what extent the BDS threats have hurt Woolworths’ sales. Dlamini said: “Our customers have been supportive [and] sales continue to increase, year on year.”
For the year to June, Woolworths’ South African clothing sales grew 10,6 per cent and food sales climbed 14,8 per cent. But in Woolworths’ annual report, released this week, CEO Ian Moir warned that “growth will be constrained in the short term” in South Africa, Australia and the rest of Africa.
Dlamini said that, just as BDS had the right to protest,
the group’s employees had the right to work and its
customers had the right to shop without being intimidated.
She said Woolworths was not sure why it was being targeted because “more than 95 per cent of our food is sourced locally [and] the government continues to authorise trade with Israel”.
But BDS-SA, which has held more than 40 protests at Woolworths stores around the country for the second month-end in a row – this one including at Sandton City, Gateway in Durban and Cavendish Square in Cape Town, plans to ramp up the pressure when the retailer holds its annual general meeting on November 26.
But BDS plan to ramp it up
BDS activist Mohammed Desai said: “We need to intensify our campaign.”
He denies that BDS has intimidated staff or customers, saying he would encourage Woolworths to report such cases to the police.
But questions have been raised as to why BDS has targeted only Woolworths, ignoring other companies with ties to Israel, including Coca-Cola, McDonalds, Danone, Nestle and Motorola.
“We know there are other companies with similar activities,” Desai said, but BDS does not have the capacity to tackle all of them at this stage.
“For now, Woolworths is our target. They are making a grave mistake by ignoring us and if we go to all those retailers our campaign will be diluted.”
Woolworths said it had responded to all communications from BDS. “We have listened to them and we shared our position on the conflict in the Middle East. We rarely source food abroad.”
Woolworths this week revealed that Moir was paid R27,5m last year, a 1,5 per cent increase on the previous year. During the financial year to June, its pre-tax profit grew 12,5 per cent to R4,1bn and its share price climbed 21 per cent to R78,15.
Other companies also taking flak
Woolworths is not the only one drawing flak for links to Israel. Desai said the pro-Palestine movement had been encouraged by the ANC’s stance, pronounced last week, against Cape Gate, G4S and Caterpillar.
Cape Gate, based in Vanderbijlpark, Gauteng, supplied materials to Israel for the building of the “apartheid wall“; G4S is contracted by the Israeli government for services in prisons and detention camps for Palestinian activists; and Caterpillar makes the bulldozers used by the Israeli army to demolish houses in Gaza.
Until now, this political pressure has not translated into bigger problems for Woolworths. But that might change. BDS, which has been supported by the ANC Youth League, is understood to have lobbied ANC heavyweights to put pressure on one of Woolworths’ largest shareholders, the Government Employees Pension Fund, which holds 17,2 per cent of the shares.
This, say political and business pundits, would send a very bad message to the JSE – where the Government Employees Pension Fund is the largest investor and concern has been expressed over the weekend that their meddling in political minefields could markets to become skittish and scare international investors who own a major portion of SA shares.
“We have been engaging the ANC on this matter for about two years. The sad reality is that we have the PIC and the [pension fund] as shareholders at Woolworths. We hope that they will leverage their influence there,” Desai said.
Coca-Cola’s South African head of public affairs Vukani Magubane, said the company did not have production facilities on any disputed territory in Israel.
She said Coca-Cola had a bottling agreement in Israel with the Central Bottling Company, which was a 100 per cent privately owned firm that had Coca-Cola plants in Bnei Brak and Ashkelon.
“Our Palestinian business employs over 400 Palestinians,” Magubane said.
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