KFC Malaysia Shutdown: Economic Hardship amid Global McDonalds and Starbucks Boycott Impact

KFC Malaysia has temporarily shuttered its outlets in Malaysia due to harsh economic conditions after reports linking the American food chain to Israel-related boycotts, as per a Reuters report.

Although the number of affected stores wasn’t specified, local media indicated that over 100 outlets were temporarily shut down, it added. The franchise has 600 outlets in the country.

As per a report by The Straits Times, 20 percent of the popular fast-food chain’s restaurants are temporarily shut. Malaysian newspaper Nanyang Siang Pau said QSR Brands is shutting 108 KFC outlets. It used information gathered from Google Maps of several eateries, which indicated being “temporarily closed».

The majority-Muslim nation of Malaysia has long supported Palestine, prompting boycotts against certain Western fast-food brands, including KFC, over Israel’s actions in Gaza, the publication said.

Despite not being officially listed by the Boycott, Divestment, Sanctions (BDS) movement, many Malaysians associate all American fast-food chains, including KFC, with links to Israel. And reports said this has hurt business.

The boycott, which began in October 2023 amid criticism of Israel’s military moves in Gaza post-October 7, has led to a shift in KFC’s branding strategy, as per The Straits Times.

“KFC is not on the BDS list of targeted companies. But many Malaysians see any American fast-food operator to be related to Israel, including KFC,» Professor Mohd Nazari Ismail, chairman of BDS Malaysia, told The Straits Times.

Earlier in the year, McDonald’s and Starbucks (corporations on the BDS list) reported significant economic repercussions in regions with effective boycotts. Berjaya Food, owner of 400 Starbucks stores in Malaysia, reported RM42.6 million net losses in October-December 2023. Local papers reported that owner Vincent Tan is “considering going private» with the company.

The report added that the impact of the boycott varies across regions in Malaysia. North-east Kelantan state and Selangor have seen many temporary closures, affecting business operations and employment opportunities.

The BDS movement was initiated in 2005 by over 170 Palestinian groups to gain global backing for the rights of the Palestinian people. The official website presents itself as a human rights initiative seeking “freedom, justice and equality» for Palestinians who “are entitled to the same rights as the rest of humanity.»

Inspired by the South African anti-apartheid movement, BDS advocates nonviolent pressure on Israel until it complies with international law, focusing on three main demands:

1. Ending its occupation and colonisation of Arab lands and dismantling the West Bank Wall.

2. Recognising the fundamental rights of Arab-Palestinians equal to Israeli citizens.

3. Respecting, protecting, and promoting the rights of Palestinian refugees to return to their homes and properties as stated in UN Resolution 194.

Amid the ongoing conflict between Israel and Hamas, BDS has called for the boycott of major multinational corporations such as McDonald’s, Puma, Google, Disney, and Amazon. The campaign is primarily aimed at exerting economic and cultural pressure on Israeli brands and brands associated with the country to deter alleged injustice against the Palestinians in Gaza and other occupied territories.

Since October, the BDS list has extended to include several Western brands that have ties significant ties in Israel or have been visibly supportive of Israel and the Israeli Defence Forces (IDF) amid allegations of genocide of Palestinians in Gaza.

Israeli Prime Minister Benjamin Netanyahu had previously associated BDS with anti-Semitism, alleging it promotes hatred towards Jewish people and discriminates against them, as per an Indian Express report. In response, BDS, on their website, said that criticism of Israel’s violations of international law should not be equated with hate, emphasising that Israel, as a country, is subject to critique like any other.