Blockade backfiring for Saudi businesses?

“As you sow, so shall you reap”, so goes the proverb. The first sector that took a hit in Qatar when the Saudi led bloc announced an unprecedented economic blockade in June earlier this year was the dairy sector. 

Residents in Qatar were worried that with most of the milk to Qatar coming from Saudi, things will become unbearable in the coming days.

However, Qatar quickly manoeuvred its way out this tight spot and arranged for dairy products to be imported from Turkey, Oman, and even United Kingdom. Not only this, entrepreneurs of Qatar quickly rose up to the occasion and took the challenge of making Qatar’s dairy sector self-sufficient. 

Power International Holding’s Baladana farm has taken the challenge on the chin and begun to import high milk producing cows from US. The farm expects to have 10, 000 such cows by next summer, which are touted to be enough to meet the daily milk needs of the 2.3 million population of Qatar. 

Meanwhile, Saudi’s largest dairy company, Almarai, which is meant to the largest dairy company in region as well has reported a no profit third quarter, the management of the company does not look so optimistic about the future either. 

One of the biggest reasons for this stagnation of Almarai’s profits is undoubtedly the blockade imposed by Saudi on Qatar. Due to the blockade Almarai has lost access to the lucrative market of Qatar, perhaps for good. Qatar was one of the biggest importers of Almarai’s products in the region. 

With Qatar accelerating it self-sufficiency drive in all essential sectors of the economy, it may not be wrong to say that Almarai has lost access to Qatar for good. Even if the blockade is eased and Almarai products do make their way into the Qatari markets again, it would be highly difficult to gain the customers back as they would definitely prefer to buy Qatari products over products imported from Saudi, the country that is leading the blockade. 

Looks like chickens are coming home to roost.