Unique-Kazakh McDonald’s shut retailers briefly after halting provides from Russia

By Mariya Gordeyeva

ALMATY (Reuters) – McDonald’s (NYSE:) licensee in Kazakhstan was compelled to briefly shut its eating places this month after slicing ties with Russian firms and operating out of provides, three sources with data of the state of affairs instructed Reuters.

The case highlights provide points confronted by many Kazakh companies within the wake of Russia’s invasion of Ukraine and the Western sanctions towards Moscow that adopted. Neighbouring Russia is Kazakhstan’s important buying and selling companion.

In a press release, the U.S.-based firm stated that its “licensee in Kazakhstan has briefly closed all of its eating places on account of native provide points. We’re working collectively to renew operations as shortly as potential.”

Meals Options, the Kazakh licensee firm, introduced the closure on Nov. 17 and cited “native provide points.” It didn’t reply to requests for remark.

Over the previous six years, McDonald’s has turn into a significant participant on the quick meals market of Kazakhstan, a Central Asian nation of 20 million folks, rising its community to 24 eating places.

The corporate had sourced some provides overseas, together with beef and rooster. The latter was sourced from Russia’s Miratorg, in response to its web site.

After Russia invaded Ukraine in what Moscow calls a “particular army operation”, McDonald’s exited Russia, promoting all of the eating places it owned to a neighborhood licensee in Might.

Meals Options, which belongs to distinguished Kazakh businessman Kairat Boranbayev, additionally began searching for suppliers elsewhere and stopped shopping for Russian merchandise in some unspecified time in the future, a supply near the corporate stated.

One other supply stated it began operating out of packaging supplies, additionally imported from Russia, in latest months, and needed to shrink its menu. Each sources weren’t authorised to speak publicly concerning the matter.

The supply stated the licensee was now awaiting deliveries from different suppliers and deliberate to reopen its eating places in December. It was unclear the place the choice to ditch Russian suppliers originated.

Marr Russia, one of many Kazakh firm’s Russian suppliers, stated it by no means labored straight with McDonald’s, coping with its Kazakh logistics companion HAVI as an alternative. It due to this fact couldn’t say whether or not gross sales to Kazakhstan have stopped, it added. HAVI declined to remark.

Miratorg stated it was a provider for Vkusno & Tochka, the Russian successor to McDonald’s, and didn’t straight tackle the query of Kazakh gross sales.

Cargill Russia, additionally beforehand talked about by Meals Options amongst its suppliers, stated it had offered the enterprise that handled McDonald’s to Russian meat producer Cherkizovo, which didn’t instantly reply to a request for remark.

Kazakh Deputy Prime Minister Serik Zhumangarin, requested about McDonald’s at a briefing on Tuesday, stated he couldn’t disclose the explanations for its short-term closure and added that the federal government was serving to the corporate localise its provides.