McDonalds recently won a land mark case in Russia, forever changing an aspect of the fast food market and its profitability. Here is one in the eye of all those who scream, ignorantly, about the Russian judicial system.
McDonalds sued the Moscow Oblast Federal Tax Authority over the 18% restaurant tax. In a suit that went straight to the top, McDonalds won by convincing the court that it indeed is not a restaurant (here's to all the Americans that see it as fine dining) and is actually a grocery store.
What?, you say.
Yes, the reason is: they provide no restaurant service and indeed give preprepared and packaged food, when customers ask for it. That is the truth, since much of their "food" is made hours and maybe even a day before and sits under heat lamps waiting for its victims, er customers.
Well, why does this matter? Simple, a huge cost savings to McDonalds, McPick, KFC, McBlin, BurgerKing, Wendies and the army of other smaller establishments of like mind. Simply put, a grocery store pays 10% tax rates while a restaurant pays 18%.
Be careful what you wish for.
It would seem, McDonalds officials either did not read the laws guiding grocery store produce or figured that no one would notice, but some one did. Actually, quite a few someones, that is the customer rights and protection civil agencies. Yes, Anglo-world, be in shock, we Russians are civilized enough to have customer protection organizations founded by citizens.
Anyways, these groups have taken McDonalds to court and also won. They are not demanding money, all they are demanding is an exact listing of all contents: edible and chemical, that go into each and every one of McDonalds (and all other such places) "food". This of course, is a disaster for the industry.
In America, land of the
One of the things that came to light in their suit against McDonalds is that by Russian consumer law, McDonalds can not legally call their milk-shakes, milk-shakes but instead milk-containing shakes, since they put large amounts of vegetable oil in the shake instead of milk fat.
This is going to get very interesting, as McDonalds has over 1,400 stores in Russia, and are not going to cut and run and will be forced to disclose on each and every product's container, what is in it, in very specific terms. Customers will finally get to know what poison the executives of McDonalds are feeding them and their children.
This should be interesting. Americans can thank Russians (not for a second am I under the delusion that they will) that we have once again led and won the fight against a new world evil: chemical crap called food.