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Last Updated: Friday, 3 February 2006, 10:12 GMT
Boycott costing Arla 1m per day
Saudi man looking at sign urging a boycott of Danish products
Arla has seen its sales come to a halt in the Middle East
Danish-Swedish dairy giant Arla Foods says the ongoing boycott of Danish products in the Middle East had so far cost it between 40m and 50m.

As the Muslim world refuses to buy Danish goods in protest over cartoons published in a Danish newspaper, Arla is losing 1m a day.

Arla has also had to send home 170 employees across Denmark due to the impact of the reduced sales.

The offending cartoons featured caricatures of the Prophet Muhammad.

They were first published last September in Danish newspaper Jyllands-Posten.

The row erupted over the last week when the cartoons were republished in a number of other European newspapers.

'Caught in the middle'

Even though Jyllands-Posten has apologised for any offence caused (but not for publishing the cartoon), sales of Danish products have ground to a halt across the Middle East.

Denmark's Prime Minister Anders Fogh Rasmussen has also tried to diffuse the crisis, having met with 76 foreign diplomats, including some from Muslim countries, though he made clear that the government could not apologise on behalf of the newspaper.

What we have done is expressed our deepest sympathy with the Muslim world and Muslim people who feel insulted by these pictures, but that doesn't seem to have helped
Arla spokesman Louis Honore

Arla spokesman Louis Honore told the BBC that the company was both "saddened and very depressed" by the ongoing situation.

"We have built up our business in the Middle East countries for 40 years, and have had production in Saudi Arabia for 20 years," he said.

"And then within five days or so this is all in ruins."

Mr Honore added that the company was trying to explain that it was innocently "caught in the middle", but that it was "very difficult for us to get [this] through".

"We have put full size advertisements in the major Saudi newspapers, showing the official Danish line on Islam, but that hasn't helped either."

Protests against the offending cartoons are continuing across the Muslim world.

Iraqi, Egyptian and Palestinian Islamic groups have called for demonstrations as Muslims attend Friday prayers, while protests have also broken out in Indonesia, the world's most populous Muslim country.

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