McDonald’s Corp.’s largest franchisee agreed to cut the cost of a Big Mac Combo in Venezuela as the Latin American nation struggles to control the world’s fastest inflation.
The price of a Big Mac Duo Combo of a hamburger plus drink will drop 7.5 percent, while french fries and soft drinks will fall 10 percent, a spokesman for Arcos Dorados Holdings Inc., who can’t be named because of company policy, said in a telephone interview from Caracas today. The decision to cut some prices came a week after the government inspected the company’s offices.
President Nicolas Maduro’s government is stepping up price controls after inflation spiralled to 56 percent and shortages of basic goods worsened. The policy is an “economic counterattack” against the “parasitic bourgeoisie,” he said in November. Since then, price regulators backed by the military have forced more than 1,000 businesses to lower prices on everything from electronics to toys.
Venezuela has the second-most overpriced currency in the world after Norway, according to The Economist’s ’Big Mac Index,’ which compares the price of the hamburger around the world. An Information Ministry spokesman didn’t respond to an e-mail and phone call seeking comment on McDonald’s price cuts.
Arcos Dorados, which operates all 139 McDonald’s in Venezuela, is selling a Big Mac Duo Combo in Caracas today for 73 bolivars ($11.60), or $1.10 at the black market rate.
“I haven’t been to McDonald’s in four months because its gotten so expensive,” Cesar Castro, 28, said in the restaurant’s Chacao branch in Caracas today. “I think it’s good the government is beginning to monitor fast food prices.”
Shares in the company, the largest operator of McDonald’s restaurants in Latin America and the Caribbean, fell 2.9 percent to $10.77 in New York as of 2:18 p.m. The company operates or franchises more than 1,990 McDonald’s in 20 countries, according to its website.
The Buenos Aires-based company said in September 2012 it has to raise prices to cover the cost of inputs it can only obtain at the black market rate.
In the first nine months of last year, Venezuela accounted for $292.4 million in revenue using the official rate of 6.3 bolivars, or about 10 percent of the company’s total revenues for the period, Arcos Dorados said in a regulatory filing Nov. 5.