Iceland's Baugur says whaling risks boycotts

REYKJAVIK, Jan 5 (Reuters) The resumption of commercial whale hunts in Iceland could prompt consumer boycotts of the island nation's companies abroad, Baugur Group, owner of British and Nordic retailers, said.

Iceland resumed commercial whaling last October after years of scientific hunts, saying it would allow whalers to catch 30 minke whales and nine endangered fin whales.

It has faced sharp criticism for the step, which snubs a 1986 ban by the International Whaling Commission, culminating in a formal protest in November from 25 nations including the United States and Britain.

''Environmental groups have also threatened to encourage people to stop shopping at Baugur-owned companies,'' Sindri Sindrason, spokesman for Baugur chief executive Jon Asgeir Johannesson, said.

Owner of UK retailer House of Fraser, Baugur described signs of damage to Icelandic tourism and threats by many groups to stop trading with foreign companies owned by Icelanders. It said this may hurt Iceland's attempts to diversify away from fishing.

It cited Icelandic Travel Industry Association evidence of cancelled foreign bookings since the resumption of the hunts.

''Whaling is damaging Icelandic companies and probably their continuing growth in the future,'' the release said.

''The fishing industry is and always will be important for Iceland. However, other sectors have been establishing themselves in the international business community with good results,'' it added.

Icelandic banks, retailers and investment firms have snapped up assets across the Nordic region, in Britain, and further afield in recent years, capitalising on surging growth at home to finance their expansion.

Sindri Sindrason, spokesman for Baugur chief executive Jon Asgeir Johannesson, said yesterday several companies Baugur had investments in had been asked where they stood on whaling.

Last month, Icelandic Foreign Minister Valgerdur Sverrisdottir told Reuters the commercial whale hunt was not a threat to the environment and said that international condemnation of whaling had become too emotional.

REUTERS MQA VC0945