General Atlantic and CVC, two major private equity firms, have hit the pause button on multimillion-dollar stake sales in companies operating US fast food brands in Indonesia and Malaysia. This decision comes as protests and boycott campaigns over the Israel-Hamas conflict disrupt business operations in the region.
Consumers in Muslim-majority Indonesia and Malaysia have been actively avoiding US brands since the start of Israel’s assault on Gaza in October. Despite the brands’ claims of neutrality on the conflict, including Starbucks, KFC, and Pizza Hut, they have been targeted due to Washington’s support for Israel.
General Atlantic halted the sale of its 20% stake in Starbucks operator Map Boga Adiperkasa, valued at approximately $54 million. Similarly, CVC Capital Partners paused the sale of its 21% stake in Malaysia’s QSR Brands, the operator of KFC and Pizza Hut in the country.
The severity of the boycotts in the region, home to 250 million Muslims, has led to a significant impact on the food and beverage industry. Companies like Unilever have reported a 15% drop in sales in Indonesia due to boycotts, while Starbucks Indonesia has emphasized its lack of affiliation with the conflict in the Middle East.
Analysts predict that the boycotts are likely to continue as long as the conflict persists. Brands in the mid-to-low price range have been most affected, with some outlets rebranding in an attempt to mitigate the impact. Despite these challenges, the industry remains resilient as it navigates through these turbulent times.