Friday, January 05, 2007

Icelandic whaling: kicking them in the Baugurs

As Iceland continues to allow the resumption of whaling, environmental groups are now threatening to boycott businesses owned by Icelandic interests. The main multinational at risk is the Baugur Group that owns many UK and European retail outlets.

Among the principal UK assets owned by the company are the supermarket chain Iceland, Booker wholesaler, Hamleys toy retailer, Woodward foodservice, Goldsmiths jewellery chain and Mappin & Webb retailer of luxury watches and fine jewellery, the fashion chains MK One and Jane Norman, the health products chain Julian Graves, LxB II a property development company, fashion company Mosaic Fashions Ltd and renown UK chain of department stores, House of Fraser.


I suspect an organized boycott and a few pickets outside Baugur owned interests would soon get this decision overturned. It will be interesting to see how much influence big business has in Iceland. I suspect, unlike the US, that it may be less than we think given Icelands top rated performance in the internationally published corruption indices where it is currently number 2 behind Finland (with the UK at 11 and the US at 20 equal with Chile).

Fundamentally therefore it is likely that economics and not reasoned argument will overturn this decision to resume whaling. However, when the Icelandic Foreign Minister Valgerdur Sverrisdottir says that the "international condemnation of whaling had become too emotional" perhaps he/she has a point.

Does catching 39 whales justify the loss of millions in profits for Icelandic firms? I suspect it works both ways and that the government will also see such losses as far outweighing the "scientific gains".

We await news of an organized boycott to see if economics and good hard cash can make the difference.

Interestingly the Baugur Group recently released the following statement stating the following:

Whaling is damaging Icelandic companies operating abroad
Says Johannesson, CEO of Baugur Group.

It is not long since the fisheries were our only source of exports. The Icelandic economy depended entirely on fishing and it was not strange that our position regarding whaling was simple: it was essential.

/...

There is much opposition to whaling around the world today, whether we like it or not. The tourist industry here in Iceland is very fearful of the effects that whaling might have, and according to The Icelandic Travel Industry Association, many bookings made by foreign groups have been cancelled since the government's decision to begin whaling again.

It is not just the tourist industry that is affected. A large number of foreign companies owned by Icelanders have had problems relating to this issue, and many groups have threatened to cease trading with these companies unless whaling is stopped immediately. Whaling is damaging Icelandic companies and probably their continuing growth in the future.


Will big business protests make a difference? Will such statements prevent the boycotts happening? This will be an interesting test of consumer power and the organizational strength of the environmental lobby.

Iceland's Baugur Says Whaling Risks Boycotts

REYKJAVIK - The resumption of commercial whale hunts in Iceland could prompt consumer boycotts of the island nation's companies abroad, Baugur Group, owner of British and Nordic retailers, said on Thursday.

Iceland resumed commercial whaling last October after years of scientific hunts, saying it would allow whalers to catch 30 minke whales and nine endangered fin whales.

It has faced sharp criticism for the step, which snubs a 1986 ban by the International Whaling Commission, culminating in a formal protest in November from 25 nations including the United States and Britain.

"Environmental groups have also threatened to encourage people to stop shopping at Baugur-owned companies," Sindri Sindrason, spokesman for Baugur chief executive Jon Asgeir Johannesson, said.

Owner of UK retailer House of Fraser, Baugur described signs of damage to Icelandic tourism and threats by many groups to stop trading with foreign companies owned by Icelanders. It said this may hurt Iceland's attempts to diversify away from fishing.

It cited Icelandic Travel Industry Association evidence of cancelled foreign bookings since the resumption of the hunts.

"Whaling is damaging Icelandic companies and probably their continuing growth in the future," the release said.

"The fishing industry is and always will be important for Iceland. However, other sectors have been establishing themselves in the international business community with good results," it added.

Icelandic banks, retailers and investment firms have snapped up assets across the Nordic region, in Britain, and further afield in recent years, capitalising on surging growth at home to finance their expansion.

Sindri Sindrason, spokesman for Baugur chief executive Jon Asgeir Johannesson, said on Thursday several companies Baugur had investments in had been asked where they stood on whaling.

Last month, Icelandic Foreign Minister Valgerdur Sverrisdottir told Reuters the commercial whale hunt was not a threat to the environment and said that international condemnation of whaling had become too emotional.

4 comments:

Anonymous said...

It is time to make Iceland pay a heavy price for its unenlightened stance on whaling.

As a mature person in a senior position in the tourism industry I am making strenuous efforts to deter people from advantaging any Icelandic business.

The Web is a much more powerful weapon than any explosive harpoon! Now this nation must learn the hard way that people power is here and is about to be used very effectively!

Anonymous said...

1) Iceland has already been whaling since 2003, just under a scientific permit. They were threatened with tourism boycotts then as well - what happened? Whale watching tourism apparently increased from 60,000 to around 90,000 more recently.
-> Most people don't care about whaling and don't see it as a problem so long as it is sustainable. The politicians make a bigger deal out of it to try to establish their "green" credentials, and deflect attention away from their own environmental mismanagement. Iceland has some of the best managed fisheries in the world, and is it any surprise, given that marine products are it's chief foreign currency earner?

The same people who are complaining now are the same people who were complaining then, that the scientific whaling is "commercial whaling in disguise". Iceland has also been saying for ages that it would resume commercial whaling sometime in 2006 or later.

There's a big fuss now, but it won't have any medium / long term effects.

> Does catching 39 whales justify
> the loss of millions in profits
> for Icelandic firms?

Who is this a question for?
The people of Iceland, or the people of the UK and a few dozen of their mostly European friend states?

Is catching 39 whales really that bad? Is catching 200 whales bad?

To the extent that the numbers taken are sustainable, if people want to financially hurt Iceland for this, I would suggest that they need to have a long hard think about things.

At the end of the day - Iceland, Norway, Japan - they are not North Korea. Imposing economic sanctions on them over this issue is frankly childish.

Rob Elliott said...

David,

I tend to agree with the sentiment of your post.

The question is open ended but ultimately it is the Icelandic government who must make that decision.

Whether it is childish or not, such boycotts could have an adverse effect on the economy of Iceland. I suspect it does not matter whether it is 10, 20 or 200 whales that are killed - the damage to Icelands repuation will persist.

From an economics perspective the question remains - is the killing of 30 whales worth all the potential hassle and cost. It would be cheaper for Iceland to simply pay the Whalers the cash equivalent to their catch and save the whales and keep the tourists.

Anonymous said...

The whaling nations, collectively, have been taking licence for too long - witness the Japanese armada now travelling to Antarctica to continue "scientific whaling"! What an insult to the intelligence of the World community - there is NO scientific justification!

Iceland has aligned itself with this deceitful whaling "club" and I, for one, intend to use the Internet plus every other resource at my disposal to go, initially,for the most vulnerable nation - Iceland! Others will follow, be assured.

The Japanese have, in "buying off" small cash-strapped nations, set certain of the rules of engagement. In supporting Japanese whaling I say, unashamedly, these small nations too must suffer the consequences of poor decisions.

Iceland, however, has made its own decision to play a part in depleting the World's oceans - our oceans!

The World community has been ignored for too long - now it's time to act!

After a lifetime of experience at a senior level in commerce I am well equipped to make things happen.

This is no idle threat - my dealings with a wide sphere in the public arena tells me that the bulk of World opinion is very much against continued whaling.

Let the battle commence!