Plus: Meme of the day
IN TODAY’S EDITION
1️⃣ KFC Malaysia hit by Israel boycott |
2️⃣ China’s communist party finally sets a plenum date |
3️⃣ Meme of the day |
Hi Intriguer. A quick scan of the headlines this morning reveals:
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A tech giant grappling with sweeping new regulations across multiple jurisdictions
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A bidding war for a slice of Mexico’s industrial property as US companies look to mitigate their global supply chain risks
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And – as we dive into our top story today – some of the world’s most famous food brands being hammered by boycotts sparked by events on the other side of the world.
Now, more than at any time in the last 30 years, the political events in a country ‘over there’ can directly impact what happens ‘back here’, so what’s going on ‘over there’ is very much everyone’s business.
In fact, that’s essentially the driving motivation behind International Intrigue, so when I come up with a pithier way to say it, I’ll have some shirts made up.
Police arrest protesters at Columbia University.
New York police arrested over 100 students on campus at Columbia last night (Tuesday). The protesters, some chanting “Free Palestine”, were calling for the university to divest from Israel. The Ivy League school says it had “no choice” but to ask police to remove the protesters after a campus building was “occupied, vandalised and blockaded”. Reports are now emerging of clashes between rival protestors and police at UCLA.
Amazon sales surge on AI boom.
The tech giant announced first-quarter revenue of $143.3B yesterday. This is up 13% from a year ago and above Wall Street expectations, thanks to advertising sales and an intensified focus on AI. Amazon is betting it can keep it up, forecasting revenue in the current quarter will hit between $144B and 149B.
Georgia police clash with protesters against Russia-style bill.
Police in the Republic of Georgia have used tear gas and water cannons to disperse crowds protesting against a Russian-style foreign agent law. Critics say the bill, which was temporarily shelved after getting the same reaction last year, would curb media freedoms and undermine Georgia’s EU bid. Lawmakers will hold another vote today (Wednesday).
Colombia’s army is missing some missiles.
President Gustavo Petro said yesterday that over a million bullets and thousands of explosives (including grenades and even missiles) are missing. The president blamed corruption and has pledged to crack down on smuggling networks within the armed forces.
Former Binance CEO sentenced to prison.
Changpeng Zhao, the co-founder and former CEO of the largest crypto exchange in the world, has been sentenced to four months in prison for failing to follow US anti-money laundering rules.
Trump fined over gag order violations.
A judge has fined former president Donald Trump $9K and threatened him with jail time after finding his posts on Truth Social violated a gag order – he’s prohibited from criticising jurors and witnesses in his hush money case.
TOP STORY
KFC closes Malaysian stores amid Israel boycott
The Malaysian operator of fast food giant Kentucky Fried Chicken (KFC) announced on Monday it was temporarily closing outlets across the country, citing “challenging economic conditions”. Local media then said the quiet bit out loud: 100 or so KFC outlets are closing in Malaysia due to an ongoing boycott.
This latest boycott is one of several around the world targeting businesses seen to be supporting – or in any way linked to – Israel’s actions in Gaza.
In KFC’s case, local activists called on folks to stop buying from the Colonel because the parent company Yum! Brands is an investor in Israeli startups.
Rival chain McDonalds has also faced boycotts around the world after outlets in Israel provided free food to Israeli soldiers in the wake of the Hamas attacks.
And Starbucks got embroiled in boycotts when it sued a union of US employees for copyright breach, after the union retweeted an image of a bulldozer breaking through the Israel-Gaza barrier. The union’s since-deleted post, sent shortly after the Hamas attacks on Israel, added the comment “Solidarity with Palestine!”
Others have pointed to Howard Schultz, former Starbucks CEO and major shareholder, and his recent investment in an Israeli cybersecurity startup.
While the boycott details vary, the results are starting to look similar:
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Starbucks has cut its yearly sales forecasts and let hundreds of staff go due in part to slowing traffic in its Middle East locations
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McDonald's has missed a key sales target and identified Malaysia, Indonesia, the Middle East, and France as markets being hit by boycotts, and
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The Middle East’s operator for KFC and Pizza Hut has cut 100 or so jobs amid “recent regional geopolitical tensions”, while the Malaysian KFC operator has (again) now shelved its planned IPO.
These brands, which operate mostly via local franchisees and licensees, have sought to mend the damage in various ways: McDonald’s HQ is reclaiming control of the entire Israeli franchise after three decades, while McDonald’s Malaysia (“a 100% Muslim-owned entity”) sued local activists last year.
Likewise, the local Starbucks operator in Malaysia has emphasised it’s actually Malaysian-owned (“we don’t even have one foreigner working in head office or stores”), while Starbucks has donated to World Central Kitchen.
But the above examples suggest this phenomenon is particularly (though not exclusively) acute in Muslim-majority regions like Southeast Asia, where damage to US corporate brands is dove-tailing with broader damage to the US national brand – a trend even highlighted by the regional head of Domino’s!
This broader US branding issue in turn risks filtering through to US-China competition across the Indo-Pacific, now a pivotal region for this century.
INTRIGUE’S TAKE
This is all another example of how globalisation’s strengths now risk becoming its vulnerabilities:
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A global brand that once brought familiarity can now transmit controversy
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Country and corporate brands that once soared together can now stumble together
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A corporate structure that once merged global clout with local tastes now means a local owner or union can tank the global brand
And it no longer matters if you’re just selling chicken, coke, jeans, or a Barbie movie. To the contrary, it’s precisely these sorts of consumer-facing, ubiquitous, and highly competitive goods that are now the most vulnerable.
And when your bottom line is your north star, there’s a temptation to double down on neutrality, but this world of ours always finds a way to force choices.
Take Coke, which first entered Israel after facing a boycott back home for not entering Israel, only to then cop a 22-year boycott by the entire Arab League. Or look at the US apparel brands that’ve avoided boycotts at home by declaring they don’t use Xinjiang cotton, only to then face boycotts in China.
To boot, the results aren’t always predictable. When Coke cut links to its German team around WWII, the Germans ended up inventing Fanta. Meanwhile in today’s Malaysia example, it turns out one of the largest investors in the local KFC operator is also Malaysia’s largest pension fund.
So these days, it doesn’t really matter if you’re a Starbucks barista, a KFC janitor, a Domino’s franchisee, a pensioner, or a jet-setting CEO, anywhere in the world. To paraphrase Pericles: you may not be taking an interest in geopolitics, but geopolitics is taking an interest in you.
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MEANWHILE, ELSEWHERE…
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🇨🇳 China: The Chinese Communist Party has announced it’ll hold its third plenum this July after an unexplained delay of nine months. The highly-anticipated conclave, helmed by President Xi and attended by 400 top leaders, will focus on economic reforms and “challenges” at home.
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🇩🇪 Germany: The International Court of Justice has declined to issue an emergency order to halt German arms sales to Israel, though a final ruling is expected to take years. The case, which argues Germany has breached the UN genocide convention by supplying weapons to Israel, was brought by Nicaragua.
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🇦🇺 Australia: The Australian government has invested $600M in quantum computing startup PsiQuantum to develop the world’s first commercially “useful” quantum computer. The Silicon Valley-based startup, founded by two Australians, will now move its headquarters to Brisbane to help retain and grow the country’s quantum sector.
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🇺🇸 USA: President Joe Biden and his Mexican counterpart Andrés Manuel López Obrador have issued a joint statement ordering their national security offices to collaborate to reduce illegal border crossings. Apprehensions along their shared border have fallen from recent highs.
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🇦🇪 UAE: Emirati officials have reportedly cancelled several meetings with the UK after Britain declined (at a UN Security Council meeting) to defend the Gulf state against accusations it was aiding a Sudanese paramilitary group. There’ve been reports the UK has also been holding secret talks with the group, which is now facing accusations of genocide.
EXTRA INTRIGUE
What we’re reading about Japan’s yen
MEME OF THE DAY
Ever wonder how an embassy really works? Our resident meme-lord Jeremy has come up with the above handy diagram to help explain.
But it’s triggered a bit of controversy on the ol’ Twitter, with one senior diplomat insisting it’s actually the other way around – ie, ambassadors do all the heavy lifting. Full marks to the EU’s ambassador to ASEAN, who gave this amusing response: “I always say the Deputy does everything and the Ambassador does the rest.”
DAILY POLL
What do you think about consumer boycotts? |
Yesterday’s poll: Where do you see the Russo-Ukraine War one year from now?
🟨⬜️⬜️⬜️⬜️⬜️ ❄️ Frozen along current lines (17%)
🟨⬜️⬜️⬜️⬜️⬜️ 🖊️ Over, with a negotiated peace (10%)
⬜️⬜️⬜️⬜️⬜️⬜️ 💥 Over, with a military defeat (9%)
🟩🟩🟩🟩🟩🟩 💣 Still going, still evolving (63%)
⬜️⬜️⬜️⬜️⬜️⬜️ ✍️ Other (write in!) (1%)
Your two cents:
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💣 P.C.J.W: “2025 will be a very interesting year for this conflict. Ukraine ‘lost’ 2023 after its failed offensive. 2024 started badly, but the injection of US assistance is likely to rebalance matters. In 2025, the conflict may very well break for one side or the other. The main question is who.”
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🖊️ I: “It should be considered a diplomatic failure of modern politics if a peace can't be negotiated for a war of this scale and after this long.”
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🖊️ J.U: “Much depends on who wins the US presidency.”
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✍️ H.S: “Unfortunately, all of these seem plausible, with the exception of a negotiated peace. Ukraine's existence would never be negotiated away by Zelenskyy, while Putin would never allow his people to see him give up what is ‘theirs’.“
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