Unilever’s financial footprint: a before and during analysis of the boycott’s impact

Abstract

This study examines the financial repercussions of the consumer boycott targeting PT Unilever Indonesia Tbk during the escalation of the Israel–Palestine conflict in late 2023. The boycott, amplified by intensified public sentiment and reinforced by Fatwa No. 83/2023 issued by the Indonesian Council of Ulama, positioned Unilever at the centre of socio-political scrutiny. Employing a descriptive quantitative approach, the research analyses liquidity, solvency, profitability, operational performance, and asset utilization ratios using secondary data from OSIRIS covering the 2021–2024 period. These years capture both pre-boycott and boycott phases and are benchmarked against industry averages as well as Unilever subsidiaries across other countries.

The findings indicate that the boycott’s impact manifests unevenly across financial dimensions. Liquidity ratios—particularly the current ratio and quick ratio—declined and remained below industry benchmarks, signalling heightened short-term financial pressure. Conversely, solvency ratios stayed structurally healthy, with Unilever Indonesia maintaining a relatively low dependence on external debt. Profitability showed mixed outcomes: while Return on Equity increased, Return on Assets and Net Profit Margin declined, largely influenced by rising operational expenditures amid reputational challenges. Asset utilization also reflected contrasting trends, with inventory turnover weakening but total asset turnover demonstrating resilient efficiency.

Overall, the study reveals that despite measurable declines in liquidity, net profitability, and sales velocity, PT Unilever Indonesia Tbk preserved notable financial stability during the boycott period. These findings underscore the firm’s underlying structural strength while highlighting the financial vulnerabilities multinational corporations may face when socio-political movements reshape consumer behaviour.