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McDonald’s Shuts Four Moscow Restaurants

McDonalds_russia

McDonald’s Corp. (MCD)’s Russian business shut four Moscow restaurants yesterday at the order of a consumer-safety agency, which said it found multiple violations of sanitary rules.

The Rospotrebnadzor agency ordered several restaurants to be closed after a probe into ingredients and wastewater this week, according to the consumer watchdog’s website. McDonald’s, the world’s largest fast-food chain by revenue, has 438 restaurants in Russia.

The closings include the first McDonald’s location to be opened in Russia, near Pushkin Square, which is the largest in the country, as well as one near the Kremlin. McDonald’s came under attack this year after the U.S. imposed sanctions against Russia following its annexation of Crimea in Ukraine. Russian lawmaker Vladimir Zhirinovsky has been calling to shut down the fast-food chain in the country.

The move to close more than two restaurants at once raises concerns about political motivations, said Gene Grabowski, a senior strategist for the Washington-based firm Levick who has handled crisis management for safety and food recalls. It might be retaliation against the U.S. for its support of Ukraine in its dispute with Russia, he said. Grabowski isn’t connected with the case.

“It appears to be suspicious,” he said in a phone interview. “Usually when a restaurant is shut down it’s for an individual reason, or it’s the whole chain.”

Studying Documents

McDonald’s said it’s studying the claims of the Russian agency to find a way to reopen the restaurants. Its largest store in Russia has 300 employees.

“Our main priority is to serve our customers with top-quality menu items,” the Oak Brook, Illinois-based company said on its website. “We will continue taking care of our employees and will do our best to continue the success of McDonald’s business in Russia.”

A U.S. representative for the chain declined to comment beyond the statement.

The Big Mac seller also is facing pressure in China and Japan, where its meat supplier OSI Group LLC was recently investigated for repackaging meat that exceeded its sell-by dates. McDonald’s, along with other American fast-food companies, was ordered by the city of Shanghai to post supplier information on its website earlier this month.

Shares of McDonald’s, which has more than 35,600 restaurants globally, fell 0.3 percent to $94.19 at the close in New York. The shares have dropped 2.9 percent this year.

(Source: Bloomberg)