McDonald’s Shuts Four Moscow Outlets on Watchdog’s Order

McDonald’s Corp. (MCD)’s Russian business shut four Moscow restaurants yesterday at the order of a consumer-safety regulator, 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 for a shutdown of 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.

Photographer: Alexander Zemlianichenko Jr/Bloomberg

The restaurant 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. Close

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Photographer: Alexander Zemlianichenko Jr/Bloomberg

The restaurant 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.

“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

Rospotrebnazdor’s branches for the Sverdlovsk region also started probes into McDonald’s restaurants, Itar-Tass newswire reported today. The watchdog’s branch for the Novgorod region filed a court claim against McDonald’s last month for allegedly understating calorie values of their burgers and milkshakes by 50 percent and for microbial contamination in other products.

Lawmaker Roman Khudyakov asked Rospotrebnadzor to investigate other U.S. fast-food chains in Russia including outlets of Yum! Brands Inc.’s KFC brand and Burger King Worldwide Inc. (BKW), Izvestia daily reported July 30.

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

Russia Ties

“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 has been investigated for repackaging meat that exceeded expiration 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.

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.

To contact the reporters on this story: Ilya Khrennikov in Moscow at ikhrennikov@bloomberg.net; Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net; Celeste Perri at cperri@bloomberg.net James Callan, Tom Lavell

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