What to Know About BDS, the Boycotts Against Israel

On- and offline, activists are urging consumers to boycott brands like Starbucks and McDonald’s over their perceived support for Israel’s ongoing military offensive in Gaza, which has killed at least 28,000 Palestinians to date. The boycotts nod to the wider Palestinian-led Boycott, Divestment, and Sanctions (BDS) movement, which seeks to mobilize international pressure on Israel to end its occupation of the Palestinian territories.

Though McDonald’s and Starbucks aren’t the only multinational companies affected by Israel’s war in Gaza, they are perhaps the most prominent—and they are feeling the heat. This month, Starbucks CEO Laxman Narasimhan told analysts over an earnings call that the world’s largest coffee chain was reporting slower sales in the first month of 2024, causing a hit in its share price. “We saw a negative impact to our business in the Middle East,” he said, adding that “events in the Middle East also had an impact in the U.S., driven by misperceptions about our position.”

The report came a few days after McDonald’s also sharply missed analyst expectations when it reported slower sales across its international licensed division at the end of December. The burger chain similarly attributed the slowdown to a drop in demand in stores in the Middle East and predominantly Muslim countries like Indonesia and Malaysia.

Analysts say they are yet to quantify or verify the specific impact of war-related boycotts, but the hit to big business has nevertheless forced brands to clarify their stance on the Israel-Hamas war. Here’s what to know about the movement and its influence during the Israel-Hamas war.

What is the BDS movement?

BDS is a Palestinian-led non-violent movement that began nearly two decades ago to call for a boycott of Israeli and international companies it believes are complicit in violating Palestinian rights. In the past, BDS has also focused on putting pressure on companies to end investment in Israel and pull out of operations in the Israeli-occupied West Bank.

Organizers say the movement was inspired by the South African anti-apartheid movement, where boycotts and sanctions played a major role in the eventual fall of the apartheid. They hope that the BDS movement will exert similar pressure on Israel to comply with international law and ensure the rights of Palestinians. “BDS is the most effective way for people of conscience to put their solidarity with Palestinian human rights into action,” Luqa AbuFarah, the North America Coordinator of the BDS National Committee, tells TIME in a statement.

Despite its non-violent nature, BDS has courted controversy in Israel and elsewhere, with some critics accusing the movement of unfairly singling out Israel. Dozens of U.S. states have even adopted anti-BDS laws that punish companies that take part in boycott or divestment actions against Israel.

Which companies are being targeted by boycotts in response to the ongoing war in Gaza?

Organizers say the BDS movement has specific targets. It strategically boycotts a small number of companies where it believes it can have a maximum impact—including HP, Chevron, Siemens, Carrefour, AXA, and Hyundai—while targeting a larger number of companies for its divestment campaign to pressure investment funds to sell their shares. Since the war in Gaza began, BDS has also endorsed new targets it did not initiate—like McDonald’s, Pizza Hut, and Burger King—calling them “organic boycott targets” because of the public support they have received after their brand franchises appeared to support Israel.

Targets are determined based on a number of factors. First, BDS looks at the level of complicity of a company or institution. “For example, a company arming the Israeli military is clearly more complicit than a company selling its beauty products in Israel,” says AbuFarah. Then, it considers whether the company being targeted can attract substantial media attention or collective buy-in from other movements. AbuFarah says that even if those conditions aren’t met, BDS will likely go after a company where they feel they have a “reasonable chance of success.”

Why are McDonald's and Starbucks facing calls for boycott?

The calls for boycotts have taken many different forms. During one New York City demonstration against the war in November, protesters chanted “Starbucks Starbucks you can’t hide, you make drinks for genocide.” Elsewhere, McDonald’s locations have reported vandalism over their purported support of Israel, with one U.K. location even being targeted with live mice.

In the case of McDonald’s, activists point to the burger chain’s Israel-based locations, which advertised their decision to offer free and discounted meals to Israeli soldiers and rescue forces in the aftermath of Hamas’s Oct. 7 attack. According to an Oct. 22 X post, McDonald’s Israel has given 100,000 free meals to security and rescue forces worth 5 million shekels ($1.3 million).

The Chicago-headquartered McDonald’s Corporation distanced itself from the move, telling TIME in a statement that the company “is not funding or supporting any governments involved in this conflict” and that “any actions from our local Developmental Licensee business partners were made independently without McDonald’s consent or approval.” Suggestions to the contrary, the company adds, amount to “disinformation.” (The impact of the boycott is being acutely felt by franchisees in Muslim-majority countries. In Malaysia, the franchise operator is seeking $1.3 million in damages from the BDS movement for alleged defamation that it claims has hurt business.)

But activists do not see McDonald’s as a neutral party. “The actions of a McDonald’s franchisee cannot be isolated from the company’s worldwide operations,” says AbuFarah, adding that the company “is responsible for ensuring that its franchisee is not involved in conduct that damages McDonald’s reputation, including any association of the brand with grave human rights violations.”

As for Starbucks, the calls to shun the company primarily stem from a dispute between the coffee chain and the union organizing its workers. On Oct. 9, two days after Israel began its retaliatory bombardment of Gaza over Hamas’s Oct. 7 massacre, Starbucks Workers United published a now-deleted post on X declaring its “Solidarity with Palestine!” The move prompted Starbucks to file a lawsuit against the union for trademark infringement, arguing that the union’s use of the Starbucks name and a similar logo had angered customers and damaged its reputation. The union has filed a countersuit. Notably, Starbucks was never the target of BDS as it didn’t qualify under the movement’s selection criteria, though the movement has subsequently backed the union.

What impact have these boycotts had?

While McDonald’s and Starbucks have admitted to seeing significant hits in their sales, profits, or shares, their attribution to the boycotts is not something analysts have yet been able to verify or quantify. “If this is just going to be a short blip where there’s a boycott for a month or two, that’s not really going to have a material impact on the long-term cash flows of a business,” says Anson Frericks, the co-founder of Strive Asset Management. “I would want to see that there’s actually a trend that’s been happening for probably two or three quarters of time before I would say that there’s actually been a success with this boycott.”

Moreover, some analysts say the slowdown, particularly at Starbucks, could be related to a broader decline in sentiment among consumers in the U.S. They also point to the economic recession in China, which has the company’s second-largest market.

Still, Frericks notes that the most successful boycotts are those that make consumers feel like they’re having an impact, which can add to the boycotts’ longevity. Those hoping for corporations to take a stance have seen developments recently. In December, the sportswear company Puma announced it would not be renewing its sponsorship of the Israeli Football Association. While Puma told TIME that the decision was unrelated to the Gaza war, the move coincided with renewed consumer backlash over its sponsorship. The company has been the target of a global boycott campaign since 2018. In January, the ice cream maker Ben & Jerry’s called for a “permanent and immediate ceasefire” in Gaza, a move that came after the brand previously tried to stop sales in the occupied West Bank and East Jerusalem, leading to a clash with its former owner, Unilever. (The company has stated that its stance was not part of the BDS movement.)

Where else is the movement being felt?

The boycott movement isn’t focused on business alone. More recently, there have also been calls for Israel to be shunned from sporting and cultural institutions, much in the way that Russia was in the aftermath of its invasion of Ukraine. Just this month, 12 Middle Eastern soccer associations called on FIFA, the sport’s global governing body, to ban the Israeli Football Association from participating in the sport over Israel’s bombardment of Gaza. The International Olympic Committee has faced similar calls to exclude Israel from this year’s Summer Olympics in Paris. Beyond the world of sports, there have also been calls for Israel to be excluded from Europe’s annual Eurovision competition.