High-calorie American burgers escape from Crimea

Representative of U.S.-based fast food corporation Burger King Worldwide, Bryson Thornton, said that the chain was not going to open its restaurants in the Crimea. It turns out that the previous statement from the company that expressed a contrary intention in April was a bit hasty.

"Neither Burger King Worldwide, nor any of our franchisees are planning to open Burger King restaurants in the Crimea," Thornton said, Izvestia reports.

In early April, Burger Rus CEO, Dmitry Medovy, said that Burger King was going to open restaurants on the peninsula. The statement came soon after it became known that the principal rival of Burger King - McDonald's - was suspending its activity in the Crimea. McDonald's restaurants were closed in the Crimea on April 3rd "for operational reasons". In total, there were three McDonald's restaurants in the Crimea: in Simferopol, Sevastopol and Yalta. Employees of the closed restaurants were offered to move to work to McDonald's restaurants in Ukraine.

In Russia, Burger King network appeared in late 2010. Currently, there are 211 restaurants of the chain in Russia. According to the register, the founder of "Burger Rus" is Burger King Russia (Cyprus) Limited, registered in Cyprus. The company is controlled by the European daughter of the American Corporation, Burger King Europe, as well as VTB Capital and the owner of Shokoladnitsa (popular chain of coffee shops in Russia), Alexander Kolobov.

The press service of Burger Rus refused to comment on the news about the plans not to enter the market of the Crimea.

"Indeed, the company was going to enter the market of the Crimea, but then the head office in the U.S. reversed its decision. According to latest information, Burger King has no plans to open restaurants there, but that could change," a source close to Burger Rus told Izvestia.

"Given that closest competitors of Burger King have left the market, now is the moment when the company could take a firm place there. But their solution is obviously dictated by the American shareholders of the company," the chairman of the board of the Moscow branch of "Support of Russia," Alexander Zharkov said.

For the time being, there is no large company on the fast food market in the Crimea. Another leader of the American fast food chain, KFC, is not present in the Crimea either.

"The Crimea is now definitely an attractive market for companies in the consumer sector. Many consider a possibility of expansion in the region, because the level of competition there is relatively low, analyst of Finam Management, Maxim Klyagin said. - The relatively low level of income for the local population could be an impediment. Naturally, during the integration of the Crimea in the Russian economy, the factor will be minimized.

"To date, there is no Western company that could work in the Crimea, as franchising involves the license transfer, but there is no necessary political and legal field in the Crimea for that now. There is no company that can issue a license to work in the Crimea, because from the perspective of those companies, this is an unrecognized territory," executive director of the Russian Franchise Association, Yuri Mikhailichenko said.

Nevertheless, the vast majority of companies operating in the Crimea and Sevastopol continue to work there; there is no outflow of capital, Deputy Prime Minister Dmitry Kozak said at the end of May, 2014, during the St. Petersburg International Economic Forum.

"We do not see the outflow of capital from the Crimea, as all companies that work there, continue to work. Over 30,000 companies opened bank accounts in Russian rubles and continue to work in the region," said Kozak, who curates the new regions - - the Crimea and Sevastopol - in the Russian government.

According to him, the foreign companies leaving the Crimea were not decisive for the regional economy. "I do not know of such concerns, I have not seen that and I can not say that large foreign companies remove capital and cease their activities there," said Kozak.

Presumably, there were Ukrainian companies working in the Crimea. The companies have taken all necessary decisions, the official continued. "From 37,000 active companies, 32,000 opened accounts in Russian rubles and continue their business activities," said deputy head of the Russian government.

"We will create all conditions for the investment climate in the Crimea. We will also prepare adequate laws about a special economic zone, where tax and customs business preferences will be determined. I'm sure that we can handle this problem," concluded Kozak. 


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Author`s name Dmitry Sudakov