The Oman Chamber of Commerce and Industry has affirmed that the continued boycott of some companies that hold the franchise rights for certain international trademarks in the Sultanate of Oman could lead to negative economic repercussions. It pointed out that these repercussions include a decline in sales and purchases, a reduction in tax revenues and fees, which may weaken these companies' ability to meet their financial obligations.
The report, prepared by the Department of Economic Research and Studies at the Chamber, stated that the boycott is a reaction by civil society individuals to the Israeli attacks on the Gaza Strip, but it includes all international trademarks without distinction. This boycott is expected to have a negative impact on companies operating in the wholesale and retail sectors, which may lead them to reduce the number of branches, cut working hours, and lay off employees, thereby increasing social pressures in the face of rising unemployment rates.
The report explained that the value of local supplies for Al Dawood Company declined from 1.2 million Rials in June 2023 to 179,000 Rials by the end of November 2023. The value of local supplies for Domino's Pizza also declined from 1.5 million Rials in June 2023 to 619,000 Rials by the end of November 2023.
According to the report, there has been a sharp decline in the revenues of Domino's Pizza from 480,000 Omani Rials in June 2023 to only 132,000 Omani Rials by the end of November 2023. This has intensified the company's losses, which increased from 39,000 Omani Rials in September to 183,000 Omani Rials by the end of November 2023. The company was already suffering losses before the boycott, but the boycott has significantly worsened these losses.
The profits of Subway Faster company also declined from 29,000 Omani Rials in June 2023 to losses of about 6,000 Omani Rials by the end of November 2023. The figures confirm that the severe effects on the companies' revenues appeared quickly after a short period of the boycott, indicating a significant impact on the operational activities of all affected companies. The report expects that the affected companies will adjust their situations by reducing the number of branches to minimize operational costs in order to sustain their presence in the market.
In addition to the direct impact on the companies that have been boycotted, the report highlighted some negative effects on the Omani economy resulting from the boycott. These effects include a decline in tax revenues, fees, and the use of various utilities such as electricity, water, internet, and telephone, as well as a decrease in revenues for municipalities and other government entities.
For example, the total tax payments for Al Dawood Company declined from 272,000 Omani Rials in June 2023 before the crisis to 47,000 Omani Rials by the end of November 2023. The volume of tax payments for Domino's Pizza also decreased from 58,000 Rials to 14,000 Rials during the same period.
According to the report, the total value of tax payments from both companies during the period from November 2022 to November 2023 amounted to approximately 3.5 million Omani Rials. When calculating the growth rate of these payments during the period from June 2023 to November 2023, it became clear that the growth rate was sharply negative, reaching 80% for Al Dawood Company and about 75% for Domino's Pizza.
The report indicates that the decline in tax revenues poses a threat to the financial balance of the estimated general budget for the year 2024, due to the decline in total revenues from various utilities received by municipalities, the electricity and internet authority, and the telephone company. This also affects related institutions and agencies such as the electricity and water authority and the institutions operating in communications and information technology, as a result of the decline in their revenues, which also reflects on their financial position and indicators in the stock market for companies listed in the securities market.