BDS Malaysia brand sentiments plummet as McDonald's sues for boycott damages

Sentiments against the Boycott, Divestment and Sanctions (BDS) Malaysia have plummeted after Gerbang Alaf Restaurants, the local licensee of McDonald's in Malaysia, sued a movement promoting boycotts against Israel for false and defamatory statements for allegedly inciting the public to boycott McDonald's Malaysia. It claimed that these statements hurt its business and are currently seeking damages amounting to US$1.31 million.

According to media intelligence firm Truescope, net sentiments around BDS and McDonald's Malaysia before the announcement of legal action was positive +6.2% and +30% respectively. 

However, after the announcement, sentiments towards BDS and McDonald's Malaysia fell to -91.6% and -58.4% respectively, with BDS recording significantly more negative sentiment than McDonalds.

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According to Kelvin Koh, managing director at Truescope Singapore, the dominant sentiment among netizens criticises BDS Malaysia, with concerns that boycotting a major entity such as McDonald’s could negatively affect the Malaysian economy.

Additionally, netizens argue that the boycott lacks foundation, as McDonald's in Malaysia and other Asian countries is operated by a Saudi Arabian entity, not an Israeli one, according to Koh. 

Conversely, a smaller segment of the Malaysian online community maintains that boycotting McDonald’s Malaysia is justifiable, citing ongoing royalty payments to its Israeli parent company, despite Saudi Arabian ownership. Some even propose rebranding McDonald's in Malaysia, akin to Russia's strategy following the suspension of McDonald's operations there, to cease royalty payments to Israel.

"In a curious twist, several netizens are speculating whether McDonald's worldwide might adopt a similar legal approach against local groups advocating for boycotts of the brand," said Koh. "This development in the McDonald's Malaysia case opens up broader conversations on corporate strategies in the face of political and social activism."

The news comes after McDonald's Malaysia confirmed that based on external legal advice, it had filed a civil suit against BDS Malaysia to protect its rights and interests in accordance with the law, according to McDonald's Malaysia when MARKETING-INTERACTIVE reached out. 

"We have been transparent and consistent with our communications that McDonald's Malaysia does not support nor condone the current conflict in the Middle East and like all Malaysians, our utmost sympathies go out to the innocent victims in Gaza," it added. 

It reiterated that it does not channel any sales, profits, royalties or franchise fees from restaurant operations to support any political cause or conflict in any part of the world, adding: 

While we understand and respect that the act of boycotting is an individual decision, we believe that it should be based on true facts and not false allegations.

In response, BDS Malaysia said that it denies defaming the restaurant chain and that it would resolve the matter in courts, according to media reports. 

BDS Malaysia's chairman, Nazari Ismail, also reportedly said that the group had only supported the efforts of Malaysians looking to boycott the fast-food chain and that it did not hold any campaigns. He argued that the group simply supported the movement and that it did not oppose or start it. 

BDS Malaysia is an organisation that aims to bring to light companies that support Israel in order to get the public to boycott them. On December 19, the group took to Instagram to post a graphic stating the name of companies profiting from the "genocide of the Palestinian people".

In the graphic, McDonald's Malaysia is named under organic boycott targets alongside restaurants such as Pizza Hut, Burger King, Domino's Pizza, Papa John's and more. In its caption, it noted that more needs to be done by Muslim leading countries in the form of boycotts and sanctions to stop "Israeli crimes".

This comes as multiple brands face significant backlash over their support of Israel as the war between the country and Gaza rages on. Malaysia has been in support of the Palestinians and citizens have since launched boycotts against major brands such as Starbucks who support or fund Israel in any way. 

Aligning itself with local sentiment, McDonald’s Malaysia has been very vocal of its support of the Palestinians since the war broke out. It recently confirmed that it has made a contribution of RM1 million to the Palestine Humanitarian Fund, which was launched by the Prime Minister's department, according to a statement by the fast-food giant that was posted on its official Instagram page last year.

By joining hands with the government and contributing to this fund, we hope to bring much-needed relief to Palestinians who are facing extremely difficult times.  

McDonald's said at the time that its contribution to the Palestine Humanitarian Fund will directly support relief efforts in Gaza, addressing the critical needs of those affected by the conflict. This includes medical aid, food and shelter as well as evacuation assistance if deemed necessary by relief organisations. 

The donation came days after the company released a statement addressing the fact that McDonald’s Israel donated free meals to Israeli soldiers, causing many online to question if the company was contributing to the destruction caused to those in Gaza. 

In its statement, McDonald's Malaysia clarified that the actions taken by its Israel branch were those of an independent market and that it does not reflect the values or practices of McDonald's Malaysia.

It added that a unilateral decision made by an individual franchisee should not be considered a global action, company policy or an official political stance taken by McDonald's globally. 

"The actions of the McDonald's operator in Iseral serve as an example of such individual actions; they were not global decisions and were not approved by any other local operators," it said. 

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