Morocco mulls boycott of Swedish firms

Friday 09/10/2015
Outside view of the construction site of the country’s first IKEA store outside Casablanca, Morocco, on September 29th.

Casablanca - The Moroccan government announced it was considering a boycott of Swedish products and companies because of Stockholm’s position on Western Sahara.
Morocco annexed Western Sahara, a former Spanish territory, in 1975. Polisario Front separatists, who had sought independence from Spain, began to battle Morocco and Mauritania in 1976 for an independent state until the United Nations brokered a ceasefire in 1991.
Rabat has proposed wide autonomy for Western Sahara but the Polisario Front rejected the proposal and insisted on the right of the Sahrawi people to determine their own future.
Moroccan Communication Minister Mustapha el-Khalfi said Sweden has decided to boycott Moroccan companies and products. He accused Sweden of trying to hamper voting on some agreements between Morocco and the European Union.
“We are heading towards a boycott of Swedish companies, according [to] the principle of reciprocity after similar campaigns in Sweden to boycott Moroccan companies,” Khalfi said.
Swedish Foreign Minister Margot Wallstrom denied that Sweden was boycotting exports from Morocco’s southern provinces. She said Sweden’s policy on the territory was the subject of an ongoing internal review but denied a decision had been made on recognising a breakaway republic in Western Sahara.
“The government does not want to pre-empt this examination. Therefore, the issue of recognition is currently not on the table,” Wallstrom said in an October 1st statement.
Sweden enjoyed a $313 million surplus in 2013 in its balance of trade with Morocco, according to figures from Morocco’s Exchange Office. Geely-owned carmaker Volvo Car Group and H & M Hennes & Mauritz AB are among Swedish companies that operate in Morocco.
Swedish furniture retailer IKEA may have been a victim of the diplomatic spat as the opening of its first store in the kingdom, planned for September 30th, was cancelled after the Moroccan government said IKEA lacked a “conformity permit”.
Local media, however, reported that Sweden’s plans to recognise Polisario Front’s Sahrawi Arab Democratic Republic in Western Sahara was behind the Rabat authorities’ decision.
IKEA has not set a new date of the opening of its store in Zenata, 17 kilometres from Casablanca. The 26,600-square-metre store will create, directly and indirectly, 1,400 jobs as the furniture giant will benefit from cheaper labour costs compared to Europe.
IKEA’s expansion into Morocco was previously hampered by pricing strategies in which Moroccans noted that catalogue prices in the kingdom were significantly higher than those listed in Europe.
The prices in IKEA’s catalogue are said to be aligned with those charged by its main competitors in Morocco, namely Kitea and Mobilia. Pricing differences also might lie in logistical costs, tariffs and currency exchange in addition to the forest tax of 12%, which is paid by furniture sellers who import finished wooden products. IKEA’s officials, however, refuted the impact of the tax, which is paid by the end user, on pricing.
IKEA Morocco responded to customer reviews regarding its pricing policy, stating on its Facebook page: “All countries have different customs duties and tax regulations affecting the final price of IKEA products.” However, IKEA’s pricing plan prompted some Moroccans — even prior to the Morocco-Sweden conflict regarding Western Sahara — to call for a boycott.
“Wow the price is more than double,” said Halima Raoui on the Je boycotte IKEA Maroc (“I boycott IKEA Morocco”) group on Facebook regarding some prices.
“It is simply outrageous, theft and scam, knowing they had large facilities and generosity from the Moroccan government on land and the development of the Zenata area. They want a return on investment a few months at the expense of Moroccan consumers,” wrote Saad Soufi.
Others were against boycotting the Swedish giant.
“Think of all the jobs this company will create… It’s perhaps worth a little sacrifice… and if it is too expensive… no one forces you to go,” said Annie Gabana.
Morocco is home to franchises such as Zara and Mango, whose prices are 10-40% higher than those in Europe, suggesting that IKEA’s higher prices in Morocco should not be a surprise.