Breaking News
Investing Pro 0
Free Webinar - Crude Oil Trading 2023 | Thursday, February 9, 2023 | 01:00PM PST Enroll Now

Exclusive-Kazakh McDonald's shut outlets temporarily after halting supplies from Russia - sources

Economy Nov 29, 2022 07:16PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. A view shows a closed McDonald's restaurant in Almaty, Kazakhstan November 28, 2022. REUTERS/Pavel Mikheyev 2/3
 
MCD
-1.69%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Mariya Gordeyeva

ALMATY (Reuters) - McDonald's (NYSE:MCD) licensee in Kazakhstan was forced to temporarily close its restaurants this month after cutting ties with Russian companies and running out of supplies, three sources with knowledge of the situation told Reuters.

The case highlights supply issues faced by many Kazakh businesses in the wake of Russia's invasion of Ukraine and the Western sanctions against Moscow that followed. Neighbouring Russia is Kazakhstan's main trading partner.

In a statement, the U.S.-based company said that its "licensee in Kazakhstan has temporarily closed all of its restaurants due to local supply issues. We are working together to resume operations as quickly as possible."

Food Solutions, the Kazakh licensee company, announced the closure on Nov. 17 and cited "local supply issues." It did not respond to requests for comment.

Over the past six years, McDonald's has become a major player on the fast food market of Kazakhstan, a Central Asian nation of 20 million people, growing its network to 24 restaurants.

The company had sourced some supplies abroad, including beef and chicken. The latter was sourced from Russia's Miratorg, according to its website.

After Russia invaded Ukraine in what Moscow calls a "special military operation", McDonald's exited Russia, selling all the restaurants it owned to a local licensee in May.

Food Solutions, which belongs to prominent Kazakh businessman Kairat Boranbayev, also started looking for suppliers elsewhere and stopped buying Russian products at some point, a source close to the company said.

Another source said it started running out of packaging materials, also imported from Russia, in recent months, and had to shrink its menu. Both sources were not authorised to talk publicly about the matter.

The source said the licensee was now awaiting deliveries from other suppliers and planned to reopen its restaurants in December. It was unclear where the decision to ditch Russian suppliers originated.

Marr Russia, one of the Kazakh company's Russian suppliers, said it never worked directly with McDonald's, dealing with its Kazakh logistics partner HAVI instead. It therefore could not say whether sales to Kazakhstan have stopped, it added. HAVI declined to comment.

Miratorg said it was a supplier for Vkusno & Tochka, the Russian successor to McDonald's, and did not directly address the question of Kazakh sales.

Cargill Russia, also previously mentioned by Food Solutions among its suppliers, said it had sold the business that dealt with McDonald's to Russian meat producer Cherkizovo, which did not immediately reply to a request for comment.

Kazakh Deputy Prime Minister Serik Zhumangarin, asked about McDonald's at a briefing on Tuesday, said he could not disclose the reasons for its temporary closure and added that the government was helping the company localise its supplies.

Exclusive-Kazakh McDonald's shut outlets temporarily after halting supplies from Russia - sources
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email