The parent company of Burger King says it doesn’t have free rein to halt its operations in Russia, citing an uncooperative business partner and the complex structure of the original deal it struck to enter the country years ago.
Restaurant Brands International, which also owns Tim Hortons and Popeyes, said in a letter through president David Shear on Thursday that while it’s working to pull out of Russia — a move taken by multinationals including Starbucks, Coca-Cola and more amid the war in Ukraine — it’s been stymied in those attempts by one of its main business partners in the country.
When Burger King first entered Russia in 2010, it did so through a deal with Russian restaurateur Alexander Kolobov and other partners in the region.
Kolobov is responsible for operating the more than 800 Burger King locations in Russia, but has not been receptive to RBI’s attempts to pull out of the region, according to Shear.
0:44 Video shows long lines at Moscow Apple store after company announces pause of operations in Russia
Video shows long lines at Moscow Apple store after company announces pause of operations in Russia – Mar 11, 2022
“We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia. He has refused to do so,” Shear wrote.
The company says it has cut off all support to its Russian franchises and says it’s donating any proceeds from those operations to the United Nations’ refugee agency.
RBI has also moved to get rid of its 15-per cent ownership stake in the joint venture.
Shear says any further attempts to cut off Burger King Russia’s use of the brand would require the support of authorities on the ground in the country, which he conceded in his letter “will not practically happen anytime soon.”
“Would we like to suspend all Burger King operations immediately in Russia? Yes. Are we able to enforce a suspension of operations today? No,” Shear wrote.
Russian brand has become ‘toxic’
Ian Lee, professor at Carleton University’s Sprott School of Business, says RBI’s hands are tied and it has few legal avenues realistically open to shut down the use of its own brand in Russia.
“The Russian courts are notorious. It’s not a rule-of-law country,” says Lee, who studies and teaches international business strategy. “It shows the risk of dealing in countries that are not rule-of-law.”
In addition to crippling sanctions targeting Russian oligarchs, businesses, its currency and wider financial system, Lee says the war in Ukraine’s most crushing economic impact on Russia could be in its brand.
Multinational businesses that are now pulling out of the country in droves won’t simply return when and if a peaceful accord is reached to end the war, he says. Even if sanctions are dropped, the “court of public opinion” will rule against any business seeking to return to the country in the months to follow.
He adds that the tumbling ruble has worsened the value proposition for being in the country in the first place.
2:10 Sanctions further isolate Russia, crush its economy
Sanctions further isolate Russia, crush its economy – Mar 10, 2022
“I think it’s very unlikely that a major corporation, not just Burger King, any major corporation that was in Russia is going to return anytime soon. And that’s because the Russian brand has become so toxic … that no company will want to have its brand associated or soiled by being associated with Russia,” Lee says.
The legal difficulty and images concerns around leaving Russia — Shear said at the start of the letter he wanted to clear up “a lot of media reports” about Burger King’s ongoing operations — are likely causing other multinationals to see what other markets they could be vulnerable in, Lee says.
“I’m sure their VPs in charge of international (business) are re-evaluating the risk profile of each country in which they’re in, because every country has a different risk profile, just like every company or consumer, has a different credit rating,” he says.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
