According to figures released by the company on Thursday, Starbucks’ Malaysian operator, Berjaya Food, reported a loss of 67 million Malaysian ringgit (about $15.1 million) for the last six months of 2024.
Berjaya Food Bhd., which operates hundreds of Starbucks outlets across Malaysia, reported its fifth consecutive quarterly loss, largely due to boycotts of U.S. fast food brands after America supported Israel’s actions in Gaza last year.
The company posted a net loss of 70.3 million ringgit for the six-month period ending in December.Comparing the period to the same period last year, revenue fell 46% to $55.6 million.
As of June 30, 2024, Berjaya ran 408 Starbucks cafes in Malaysia, according to its annual report. However, the company does not separate Starbucks revenue from its financial breakdown.
Despite these difficulties, the company highlighted its dedication to growth, stating: ” While the Starbucks brand faces challenges, the Group remains committed to growth and diversification by expanding its brand portfolio and leveraging opportunities locally and internationally.”
Starbucks in Malaysia: Impact of Gaza Conflict and Boycotts
A cease-fire has been in effect in Gaza since last month, providing a temporary pause in Israel’s devastating military actions, which have claimed the lives of at least 48,300 people, the majority of them women and children.
The violence has left Gaza in ruins, with entire neighborhoods and infrastructure destroyed, creating a dire humanitarian crisis.
In November, the International Criminal Court (ICC) issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant, accusing them of war crimes and crimes against humanity for their roles in the ongoing conflict. These warrants reflect the growing international scrutiny over Israel’s actions in Gaza.
Additionally, Israel now faces a genocide case at the International Court of Justice, further highlighting the serious legal consequences the country could face over its conduct in the region.
While the cease-fire has brought some relief, the legal and moral questions surrounding the war and its devastating impact on civilians continue to intensify, with calls for justice and accountability growing louder around the world.
The connection between the Gaza crisis and Starbucks’ financial struggles in Malaysia highlights how global political issues can influence consumer behavior, leading to economic consequences for international brands.
With mounting international legal pressure on Israel, including war crimes charges and a genocide case at the International Court of Justice, businesses tied to U.S. corporations are facing a challenging environment as consumers protest actions they view as complicit in the ongoing violence.
This broader geopolitical situation underscores the influence of global activism and its tangible impact on markets and businesses around the world.
Founders concern
In January, Berjaya founder Vincent Tan stated that there was no reason to continue the Starbucks boycott following the ceasefire in Gaza. According to Malaysiakini, Tan pointed out that boycotting Starbucks does not impact Israel in any way. Berjaya, which also operates the Kenny Rogers Roasters chain in Malaysia and the Paris Baguette brand in the Philippines, remains focused on its business operations.
The company expressed confidence in its future, saying it is ” well-positioned for further progress and stronger financial results.”
However, some Starbucks customers have criticized the company for not doing enough to pressure Israel to end the fighting in Gaza. In response, Starbucks CEO Brian Niccol, during his first visit to the Middle East since taking the helm of the company in September, defended the brand. He stated, ” The boycotts were ‘not based on anything that’s accurate or true. We’ve never supported any militaries.”
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