Malaysia’s Starbucks operator posts US$8.8 million loss due to anti-Israel boycott

Berjaya Food Bhd., which operates the Starbucks coffee chain in Malaysia, posted a loss in the fourth quarter as consumer sentiment on the Middle East conflict hurt sales.

The company, part of conglomerate Berjaya Corporation Bhd., reported a net loss of 38.2 million ringgit (US$8.8 million) for the three months that ended in June, a reversal from a profit of 17.28 million ringgit a year ago, it said in a financial report. Sales fell by more than half.

“The significantly lower revenue and pre-tax loss incurred in the current quarter under review were mainly due to the current sentiment in relation to the conflict in the Middle East,” Berjaya Food said in the report published on Tuesday.

Fast food brands from the US have been facing challenges in Asia, the Middle East and some parts of Europe amid calls to boycott the brands due to their perceived links to Israel. McDonald’s, for instance, became a target of boycotts after photos and videos on social media showed its stores in Israel giving meals to the nation’s soldiers following the October 7 attack.

Berjaya Food reported a net loss of 91.5 million ringgit and a 35 per cent drop in revenue for its full-year period that ended in June. In addition to the Middle East conflict, it also attributed the poor performance to a one-off loss from the disposal of its entire equity interest in Jollibean Foods Pte Ltd. in November.