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OKINAWA (March 4): Malaysian tycoon Tan Sri Vincent Tan said on Monday that the boycott of the local Starbucks coffee chain is “unnecessary”, as the US brand does not own any share in the Malaysian operations.
Starbucks in Malaysia is operated by Berjaya Food Bhd, controlled by Berjaya Corp Bhd, which in turn was founded by Tan. The comment marks Tan’s first reaction to the public boycott following the Israel-Palestinian conflict.
“We don't even have one foreigner working in the head office or stores,” Tan said at a press conference for another event in Japan. “In the stores, 80% to 85% of employees are Muslim.”
Starbucks, along with a few other global brands such as fast food chain McDonald’s, has been facing intense boycotts, due to their purported support or perceived link to Israel, amid the ongoing conflict in Gaza.
Berjaya Food, which relies on Starbucks for some 90% of its revenue, has lost some 25% of its market value on Bursa Malaysia since Israel ramped up its deadly strikes in Palestine, following the Hamas attack on Oct 7.
Starbucks Corp, based and listed in the US, has no shares in the coffee chain’s operations in Malaysia, Tan stressed.
Still, there were signs that customers had returned to Starbucks, he noted.
“I believe the trend reflects our upcoming third-quarter financial results,” Tan said. “Our (Berjaya Food’s) third-quarter results [are] expected to [be] better.”
Berjaya Food sank into red for the second quarter ended Dec 31, 2023 (2QFY2024), with a net loss of RM42.58 million, against a net profit of RM35.49 million a year earlier, also partly hurt by a RM10.5 million one-off loss from the disposal of its entire equity interest in Jollibean Foods Pte Ltd.
Revenue for the most recent quarter fell 38.19% to RM182.55 million, versus RM295.32 million for 2QFY2023, on lower sales because of the boycott.
”My message to our Malaysian friends [is that] there is no need to boycott. If you want to boycott, there are many things that we need to boycott, for example the iPhone and iPad,” he added.