On Wednesday, Russia ordered to close down 4 restaurants of McDonald’s Corporation (NYSE:MCD) in Moscow, accusing the fast food chain of violating sanitary rules and regulations. However, the worsening of U.S.-Russian ties over Ukraine is considered to be a major force behind this action and the accusation of making sanitary violations is considered to be just an excuse.
One of these 4 restaurants which have been temporarily closed down, is the oldest and the first ever restaurant of McDonald’s Corporation (NYSE:MCD) in the Soviet Union. According to regular visitors, the restaurant was found to be closed on Wednesday evening which is usually jam-packed with people.
According to officials Rospotrebnadzor, more commonly known as watchdog, the restaurant was making a number of sanitary violations, which left them with no option but to seal parts of the place. Moreover, the officials refused to comment when asked if their decision and anything to do with the Ukraine crisis.
The first ever restaurant of McDonald’s Corporation (NYSE:MCD) was opened up in 1990 in Moscow and it soon became extremely popular amongst the local population. The success of the restaurant can be assessed by fact that people used to book the place for wedding ceremonies.The other restaurant of McDonald’s Corporation (NYSE:MCD) which has been shut down is located on Manezh square near the offices of President Vladimir Putin.
The McDonald’s Corporation (NYSE:MCD) unit in Russia is investigating the matter and hopes to re-open one of the most popular fast food chains in Russia as soon as possible. According to reports of watchdog, the fast-food chain was warned after a few violations were identified in the quality of the products it was using. However, McDonald’s Corporation (NYSE:MCD) clearly stated that they did not receive any complaint.
In the past, several other international food chains have been shut down by the watchdog and nearly all of these foreign food chains claimed that watchdog was acting in the political interests of its country rather than being completely unbiased. However, watchdog refused to agree to any of these allegations.
For example, the watchdog banned Georgian wine soon after relations between Tbilisi and Washington improved. Another decision by the watchdog banned the import of fruits and vegetables from Poland mainly due to political interests.
When countries like US, Canada and Norway imposed sanctions over Ukraine, Russia banned imports of several food items from them. It only allowed import of items that were essential for the growth of its agriculture and food industry.
For McDonald’s Corporation (NYSE:MCD), Russia is one of its biggest sources of earning as it operates 438 restaurants in the country. Europe alone contributes nearly 35 percent of the total profits of the company. Thus, even the temporary closing down of its restaurants will incur the company huge losses.
Investigation of the matter is underway however, until and unless the Ukraine crisis is resolved, experts project that an unbiased decision in favor of McDonald’s Corporation (NYSE:MCD) is very unlikely to be made.