The boycott of Danish goods called by Islamic countries to protest the publication of Prophet Mohammed caricatures is costing Danish businesses millions of dollars a day, analysts and companies said.
So far, Arla Foods, one of Europe's largest dairy companies, is suffering most, but the effects could spread.
Danish goods are threatened in 20 Muslim countries, representing 10 billion kroner (US$1.6 billion) annually, said Steen Bocian, a chief analyst with Danske Bank.
"However, seen in a macro-economic perspective, that amount is rather small," Bocian said on Monday.
In 2004, Denmark's exports worldwide amounted to 452 billion kroner, with 25 percent of that from dairy products, he said.
Overall, it's too early to say how much the boycott is hurting business, said Marianne Castenskiold, a spokeswoman for the Confederation of Danish Industries, representing the country's major companies. Saudi Arabia began the boycott Jan. 26 when supermarkets either put up signs urging shoppers to stop buying Danish goods or removed products from the shelves.
Anger has spread over the 12 caricatures of the Prophet Moh-ammed that were first published in Denmark's Jyllands-Posten in September and recently reprinted in European media and elsewhere in what the newspapers say is a statement of free speech.
One depicted the prophet wearing a turban shaped as a bomb with a burning fuse. The Danish paper said it had asked cartoonists to draw the pictures because the media were practicing self-censorship when it came to Muslim issues.
The drawings have touched a raw nerve in part because Islamic law is interpreted to forbid any depictions of Islam's most revered figure for fear they could lead to idolatry.
Arla Foods is losing an estimated 10 million kroner per day in the boycott, said spokeswoman Astrid Gade Nielsen.
The Danish-Swedish cooperative, which placed ads in Saudi newspapers last week to try to counter the boycott, has 2.6 billion kroner in annual sales in the Middle East and about 1,000 employees in the region, its main market outside Europe.
The boycott of its products was almost total in the region, Gade Nielsen said.
Placing ads appears to have worked for Nestle. An Arab boycott of milk powder products made by the Swiss food and drink giant subsided shortly after the company ran a newspaper advertisement in Saudi Arabia explaining that the products were not made in Denmark, a company spokesman said on Monday.
"There was a campaign of e-mails, of flyers, saying that Klim and Nido were products made in Denmark," said Nestle spokesman Francois-Xavier Perroud. "We corrected that wrong information and within one or two days the situation normalized again."
He said the ad published about 10 days ago in a Saudi newspaper was "simply reacting to misinformation that was being bandied about."
Lego, one of Denmark's best-known brands internationally, said the protests and boycotts had had little consequence.
"The region is a very small market for us," Lego spokeswoman Charlotte Simonsen said. "We have been told that some shops in the Middle East have removed our products from the shelves."
The privately held group doesn't market its toys as being Danish -- "Lego is an international brand" she said.
Danish tour operators, meanwhile, have canceled trips to Egypt, Morocco and Tunisia following warnings by Denmark's Foreign Ministry urging people to avoid Muslim countries.
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