Nasra to Gaza .. The boycott topples Knotaki and Pizza Hut in Turkey Economy news

Al -Jazeera Net Correspondents

Istanbul – In an unprecedented development, the American company “Yam Brands”, which owns the series Kentucky and Peza Hut on the eighth of this month, announced the termination of the concession agreement with the local company “Ish Ghada” for restaurants in Turkey, which led to the closure of 537 branches and the announcement of the Turkish operator, his bankruptcy Badoun exceeded 7.7 billion Turkish liras (about 214 million dollars).

Although “Yam Brands” justified her decision not to adhere to “Ish Ghada” to employment and quality standards, the timing of the closure raises questions about the role played by the boycott campaign that has escalated in Turkey since the start of the Israeli aggression on the Gaza Strip. According to local reports, Kentucky sales in Türkiye have declined by 40% in recent months, which exacerbated the financial crisis that the Turkish company was suffering.

With this rapid collapse, questions arise about the repercussions of the decision on the economic sector, the fate of thousands of workers, and the future of foreign privileges in a consumer environment that has become more aware and influential.

From the privilege to bankruptcy

Since she obtained the rights of Kentucky and Pizza Hut in Turkey in 2020, “Esh Ghada” has adopted a quick expansion strategy, as the number of Kentucky branches increased from 125 to 283, and Pizza Hut from 45 to 254 in a short period, which made her win the award for “Best Franchise Partner For the year 2023 “Yam Brands”.

But the local operator relied on unaccounted growth based on rapid expansion, which made him face increasing financial pressure.

As this expansion was not based on a solid financial base, but rather on excessive borrowing, which made the company face a suffocating liquidity crisis with the high interest rates.

Its investments were not limited to the restaurants sector, as it expanded to other areas, including the acquisition of the “Biman” company to produce nuts, the purchase of the German rims factory “BBS”, in addition to owning the German “Ryan Mine TV” channel.

“Yam Brands” justified her decision to end the concession contract with “Ish Ghada” not to adhere to the latter’s operating and quality standards, as the financial manager of the company Chris Turner said that his company provided continuous support to the Turkish operator, but he failed to improve his performance, adding that the sales of Kentucky and Pizza Hut in Turkey were. Much less than the global average, which made the continuation of activity economically glory.

However, the timing of the decision came in light of the escalation of the boycott campaign that targeted the brands accused of supporting Israel, which has launched a continuous aggression on the Gaza Strip since October 2023, which had a clear impact on the performance of many Western brands in Türkiye.

With the closure of 537 branches in one go, more than 7,000 workers found themselves without jobs, as many of them did not receive their salaries for last January and did not receive their financial dues, which prompted the first Istanbul Commercial Court to grant “Ish Ghada” a 3 -month deadline To resolve its crisis, judicial commissioners were appointed to supervise the management of the company’s assets, amid expectations to liquidate its assets to pay the accumulated debts.

The boycott in Türkiye

The boycott campaign in Türkiye has turned from a popular movement into an influential economic power, which prompted foreign and local companies to reassess their investments. With the escalation of protests against the Israeli aggression on Gaza.

The official boycott was mainly in:

• Turkish railway decisions and Turkish Airlines to remove the products of companies supporting the occupation from food vehicles and airport halls.
• 45 municipalities belonging to the Justice and Development Party announced the suspension of the sale of Israeli products.
• The Turkish parliament removed these Israeli products from its companions.
• On May 2, 2024, the Turkish Ministry of Trade announced a full stand for commercial transactions with Israel until humanitarian aid is allowed to enter the Gaza Strip without restrictions.
• Last month, Turkey, under the direction of President Recep Tayyip Erdogan, decided to continue its boycott of the World Economic Forum for the continuous Israeli aggression on the Gaza Strip, as the forum is considered supportive of Israel.

At the level of the private sector, the most prominent boycott operations were:

• The companies dealing with Israel have witnessed unprecedented pressure, as the popular protests and pressure forced the “Zorlo” Energy Holding Group – the largest Turkish investor in Israel – to sell its shares in 3 Israeli companies, to end investments of one billion dollars.
• The impact of the boycott extended to the drinks and restaurants sector, as the head of the Turkish Restaurant and Tourism Association stressed that sales of soft drinks supporting the occupation decreased by 50%, which prompted companies to provide significant discounts to reduce losses.
• He also pointed out that sales of soft drinks in restaurants and cafes decreased in half, indicating the direct impact of the boycott on the revenues of major companies.

At the level of financial markets, the President of the Consumers Union in Turkey, Mohamed Bulent Deniz, said that the “Ammunition is not for us” campaign, which was launched in response to Israeli attacks on the Gaza Strip, clearly affected the public budgets of the companies listed on the stock exchange, as this was reflected in the prices of their products in stores Great, which prompted some companies to launch major discounts to try to reduce the impact of the sharp decline in demand.

Economic tool

In the context, the researcher in political economy Hussein Ozkan believes that the boycott campaign in Turkey is no longer just a consumer protest, but rather has turned into an economic tool that reshapes the market and pushes international companies to reconsider their investment strategies.

In his opinion, the closure of Kentucky and Pizza Hut in Türkiye was not just a financial crisis, but rather the result of the impact of the boycott that destabilized the local operator and accelerated its collapse in a troubled economic environment.

In an interview with Al -Jazeera Net, Ozkan adds that the absence of official statistics does not deny that future studies will reveal a significant decline in targeted brand sales, which reflects that foreign companies no longer measure their success in the Turkish market only with profit rates, but rather their ability to adapt to political transformations And social.

However, despite the strength of the influence, Ozkan notes that the boycott is facing a real challenge as its momentum declined after the announcement of the ceasefire in Gaza, which reflects the problem of linking it to immediate events instead of consolidating it as a permanent economic approach.

And he warns that some companies have started exploiting this decline through extensive marketing campaigns to restore their market share, stressing that the real impact of the boycott lies only in its scope, but in its continuity and its ability to impose permanent changes in the policies of international companies.