Tim Hortons Targets Mexico as Trump Stokes Cross-Border Tensionsby and
Canadian brand forms joint venture to open cafes in Mexico
Parent company drew flak for moving headquarters to Canada
With the trade agreement that long unified North America under fire, a quintessential Canadian brand is looking to cozy up with Mexico over doughnuts.
Tim Hortons, the coffee chain owned by Restaurant Brands International Inc., announced a joint venture with a group of Mexican investors on Friday. The team will create a master franchisee in charge of developing the brand in the Latin American country, creating a beachhead for Tim Hortons in the region.
“Mexico has a thriving coffee market, so we are very optimistic about the opportunity to grow the brand across the country,” Daniel Schwartz, chief executive officer of Restaurant Brands, said in a statement.
The push comes at a time of simmering cross-border tensions between the U.S. and Mexico. President Donald Trump and other Republicans are increasingly discussing the idea of a border tax on Mexican imports, potentially upending decades of close economic cooperation. Trump said on Twitter Friday that Mexico “has taken advantage of the U.S. for long enough” by not addressing trade deficits and border security.
Restaurant Brands, which also owns Burger King, kicked up its own cross-border controversy when it was formed in 2014. The company was created when Miami-based Burger King Worldwide Inc. acquired Tim Hortons for about $11 billion and established its corporate headquarters in Canada.
The move drew fire from U.S. lawmakers because it was seen as a way to avoid paying taxes. But Burger King said at the time that the change wouldn’t materially improve its tax rate.
Tim Hortons has already expanded into the U.S., U.K. and Middle East, but its stronghold remains Canada. Forays into America have focused on northern cities, such as Minneapolis and Cincinnati. As of September, Tim Hortons had 3,717 stores in Canada, 657 in the U.S. and 118 in the rest of the world.
The Mexico push will be a test of whether a brand named for a Canadian hockey star can make it in Latin America.
“We believe it will have great success in Mexico and look forward to opening our restaurants soon,” said Mauricio Barrera Garza, head of the new joint venture company.