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The alleged stance of Burberry has caused severe hatred for its brand in China with Regina IP, a Hong Kong lawmaker saying she will stop buying the Burberry products.
Just recently, the UK took a bold step to impose a sanction on the happenings in Xinjiang, the western Chinese Region. In response, China has also sanctioned some companies and organizations in the UK for peddling falsehood. Burberry becomes the first luxurious company to be affected by these sanctions after its Tartan design hallmark was removed from a popular video game.
The sanction targets organizations that supported the reports of human rights abuse in Xinjiang. Burberry Group Plc (LON: BRBY) is part of a group known as the Better Cotton Initiative, and in October, they protested against the said human rights abuse in the western Chinese Region by suspending approval of cotton from Xinjiang. Soon after these sanctions, Burberry hallmark was scrubbed from the clothing of the Honor of Kings video game characters as a retaliation.
Also, the organization has lost its Chinese brand ambassador Zhou Dongyu. The agency of the popular Chinese actress stated that their decision lies in the fact that Burberry has not clarified its stand on the Xinjiang saga. The accusation did not only come from Burberry. UN experts and activists have also leveled accusations on China for relying on torture, mass detainment, forced labor, and sterilizations on the Uighurs in the region.
The Chinese government did not sit back, but denied all the allegations and stated that their actions are meant to counter extremism. The alleged stance of Burberry has caused severe hatred for its brand in China with Regina IP, a Hong Kong lawmaker saying she will stop buying the Burberry products.
“Burberry is one of my favorite brands. But I will stop buying Burberry products. I stand with my country in boycotting companies that spread lies about Xinjiang, ” she said.
Burberry made their stand clear in a letter to the British lawmakers in November last year, that they do not have any supplier based in Xinjiang, neither do they engage in any operations there. In the letter, they clarified that they do not tolerate any modern slavery among their supplies, neither do they agree on forced prison labor. Nike Inc (NYSE: NKE), Adidas AG (ETR: ADS), H&M (STO: HM-B) had previously expressed their side of criticism on the alleged human rights abuse in Xinjiang.
The China National Council of Textile and Apparel has in a statement asked the international brands to refrain from what they call wrong behavior and to have enough respect for Chinese customers to also refrain from the sidelining of Xinjiang in their supply chain. So far, almost all the companies being heavily criticized for their alleged misinformation on the issue have been affected by their stock performance.
Burberry stock is down by 2.80%, and Adidas by 0.34%. H&M has been dropped from the Chinese retail platforms and most of the companies are trading between 2% to 6% lower. The Chinese customers are expecting Burberry to issue an official statement to calm the situation.