Diplomatic Tensions Shape Danone’s Strategy in North Africa
Danone’s operations in North Africa are being reshaped by France’s shifting diplomatic ties in the region, as the dairy and beverage giant navigates disparate relations with Algeria and Morocco. The geopolitical climate is proving a decisive factor in how the company adjusts its involvement in both countries.
In Algeria, Danone has taken a more cautious stance. Following prolonged diplomatic strain between Algiers and Paris, the French multinational has stepped back by transferring management control of its joint venture, Danone Djurdjura, to local stakeholder Benhamadi Group, which holds a 49% stake. The shift, initiated in 2023, allows the Algerian partner to operate the brand independently and signals Danone’s strategic retreat amid political pressure and economic uncertainty.
This move coincides with broader challenges faced by foreign FMCG firms in Algeria, including tightening import restrictions and a push for domestic production. By scaling down its leadership role while maintaining ownership, Danone appears to be insulating itself from intensifying regulatory headwinds while keeping a foothold in the market.
In contrast, Morocco represents a stable and increasingly favourable environment for Danone. With French-Moroccan relations remaining strong, Danone continues to invest in Centrale Danone, its local subsidiary and market leader in dairy. The group is betting on long-term growth in Morocco, bolstered by rising consumer demand and government policies supportive of foreign investment in food and agriculture.
This divergence highlights how political dynamics are directly influencing FMCG strategies in the MENA region. Companies like Danone are recalibrating their positioning not only based on market potential and operational performance, but also in accordance with the evolving geopolitical landscape.
As regulatory frameworks tighten in Algeria and investor confidence in Morocco grows, the regional disparity is expected to deepen, prompting other multinational FMCG players to reconsider their regional investment footprints. For global brands, aligning operations with diplomatic currents may increasingly become as crucial as responding to consumer demand.