McDonald’s Corp. is set to abandon Kazakhstan after disruptions triggered by the invasion of Ukraine left the central Asian nation without a substitute for Russian meat supplies, according to people familiar with the matter.
(Bloomberg) — McDonald’s Corp. is set to abandon Kazakhstan after disruptions triggered by the invasion of Ukraine left the central Asian nation without a substitute for Russian meat supplies, according to people familiar with the matter.
The world’s biggest fast-food chain will withdraw its trademark golden arches from the nation of 20 million that borders Russia to the north after only six years. Russia’s invasion last year has upended global supply chains and bounced back to the former Soviet republic.
Although Kazakh businesses aren’t covered by sanctions against Moscow, McDonald’s — which exited Russia following the invasion — banned its local franchisee from procuring meat patties from Russian suppliers, the people familiar said, declining to be named as the information is not public. The 24 McDonald’s restaurants owned by TOO Food Solutions KZ suspended operations in November, citing supply issues.
The Kazakh business was unable to source meat patties from local or European suppliers, with higher prices and freight costs to transport supplies across the vast nation would mean running business at a loss, the people said. McDonald’s declined to comment.
The fate of McDonald’s in Kazakhstan is also complicated by franchisee owner Kairat Boranbayev, who was detained in March on charges embezzlement. Boranbayev, a relative of former President Nursultan Nazarbayev who fell out of favor with the nation’s new leadership following deadly riots a year ago, brought the fast-food chain to Kazakhstan in 2016.
Boranbayev also owned McDonald’s franchise in Belarus, which lost its license last year over supply issues.
McDonald’s, whose arrival in the Soviet Union in 1990 became a symbol of the opening up the country’s economy and its pivot to capitalism, sold its restaurant portfolio in Russia in May. At its pre-invasion peak, McDonald’s ran 853 restaurants in Russia. Alexander Govor, who bought the restaurants from McDonald’s, reopened them under a new brand, Vkusno-i Tochka, or “Tasty—Period.”
–With assistance from Leslie Patton and Aliaksandr Kudrytski.
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