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. Last Updated: 07/27/2016

Big Mac seeks a bigger share in joint venture

The official message was that McDonald's Moscow is a success story for Russia, but public relations aside, the fast food giant's parent company has said it will take legal control of the joint venture away from its Russian partner.


George Cohen, chairman of the board of McDonald's Canada and deputy director of McDonald's Moscow, said at a press conference Tuesday that Russians should feel proud that McDonald's was now meeting 98 percent of its needs from over 80 local sources.


The number of foreign staff had fallen from 80 two years ago to 10 today, he said. About 1, 300 Russians and managers trained at Hamburger University, McDonald's training center in the United States, were now running the company.


But he said McDonald's had reached agreement with the city of a Moscow, owner of 51 percent of the joint venture, to transfer a majority share to McDonald's Canada.


"Before a big expansion we should be in a majority position", he said. "The city agrees and we are in the process of negotiating that".


"The city wants to retain a certain percentage and we agree. They have been very good with sites and locations. But if the 49-percent partner is putting in all the millions of dollars in hard currency and it's going to continue to do that to expand, it's reasonable they shouldn't be the minority partner", Cohen said.


McDonald's expansion will see it open two new Moscow restaurants in the summer of 1993, one on the Arbat and the other on the comer of Ogareva Ulitsa and Tverskaya Ulitsa. Another site is under consideration on Prospekt Mira, Cohen said.


McDonald's is building a 12-story office tower on top of the Ogareva Ulitsa site and will use the hard-currency profits from leasing out the premises to import new restaurant equipment.


McDonald's investment in its Russian operations had reached about $68 million, Cohen said, of which about $15 million has gone to the construction of the office tower.


Most was spent several years ago when McDonald's built a huge farm and factory complex to meet its specialized food and packaging needs.