Carl Mortished: World business briefing
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The latest gastronomic sensation in France is the burger - and not just any beef patty in a bun. Only the McDo will do. You can ignore anti-globalisation protests, French cultural snobbery and antipathy over Iraq, the monkeys have not merely surrendered but are prostrating themselves at the Golden Arch.
McDonald's has conquered the last bastion of global resistance to American cuisine and it has the turnover and profits to prove it. In 2007, its French revenues increased by 11 per cent to €3 billion (£2.3 billion), almost 10 per cent on a like-for-like basis.
Even more astonishing, France is leading the field for McDonald's in Europe; its profitability is ahead of Britain and showing a clean pair of heels to the stagnating American market. The double-digit sales growth continued in the first quarter and there is evidence that the Big Mac is outpacing rivals in the French fast-food arena.
A good deal of the credit goes to local management and to Jean-Pierre Petit, the McDo boss from Marseilles who put French style into the operation, including burgers with Reblochon cheese.
He shed the loud yellow plastic in favour of something more subtle - the French company website invites you to tour a model McDo eatery that has more the look of a restaurant in Tokyo, with leather, steel and pastel shades - than a diner in Baltimore.
Better upholstery (and cheese) doesn't tell the whole story, nor even a Gallic tendency for contrarian behaviour. The world, too, is changing. If the French are looking for better value at the cheap end of the food market than is provided by the typical menu prix fixe, that trend is soon to be replicated worldwide.
Household budgets are tighter due to rising fuel and grocery bills and that environment works in favour of companies such as McDonald's, which operate on enormous economies of scale and can offer a keenly priced meal. These rising price trends are creating dramas further up the food chain, where suppliers of beef and poultry are being snatched and grabbed in a massive corporate upheaval.
Meatpacking used to be the dullest business, an unpleasant trade in blood and offal with very slim margins. Caught between the volatile pricing of pork bellies on the one hand and the ruthless pressure of the supermarkets on the other, the abattoirs and sausage factories looked like little more than tolling operations, adding small value.
Their role has not changed but their scale is about to increase hugely. The food packing and processing industry is on the march in search of pricing power and market share. This unsexy business sector is about to have its day and a few companies are aggressively pushing for advantage.
In the space of a single week in June, two of Britain's leading meatpackers fell into foreign ownership. Grampian Country Foods, of Scotland, was bought by Vion, a Dutch food giant, while Moy Park, the Northern Irish poultry processor, was snapped up by Marfrig, of Brazil, for £348 million.
The latter deal is a signal of the growing might of Brazil in agricultural produce and it speaks volumes of its aggressive stance in the world trade talks in Geneva. Brazil is a big exporter of beef and poultry; it claims 40 per cent of the global chicken trade and it would like to export more beef into Europe but is frustrated by European Union restrictions.
The deal provoked a protest from the National Farmers' Union in Britain, which gave warning that the purchase of Moy Park should not become a “Trojan horse” for the import of Latin American animal carcases into Europe.
Meanwhile, similar turmoil has beset the US meat sector. Another Brazilian meatpacker, JBS, bought Swift, a big American beef processor, last year for $1.4 billion.
This year the Brazilians returned with a proposal to buy National Beef Packing and the beef unit of Smithfield, two big rivals, provoking protests from American cattle ranchers and congressional demands for an anti-trust investigation.
The American cattle ranchers should blame US arable farmers rather than Brazilians. The margins of meatpackers have been badly squeezed in recent years because of high animal feed costs.
The biofuel industry has been competing for supplies of grain, pushing up the cost of soybean and corn. That, in turn, has hurt the meat industry, causing share prices to crumble and creating opportunities for the giants of Brazil to grab market share.
All that may be about to change because America is now expecting a good corn harvest. The price signal has been heard and more grain has been planted, which should bring down feed costs, but the seeds have been sown for meat price increases.
The food industry is having its day, but the firms that enjoy the sunshine will not be the ones that suffered the rain. In their place will be new names from overseas, with more power and pricing muscle.
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its not a matter of MacDoo breakthrough in France, but a french cuisine break in.
However, never forget to enjoy only in moderation.
Henry, Hucknall, Notts
It's no surprise to see McDo doing so well given the lack of competition in the fast food business in France.
No Burger King , very few KFC , Wendy's and Taco Bell are unheard of.
Which is ,everyone will agree, a very good thing.
Julio, Nancy, France
To John in Taipea,
I guess Mc D's in Taipea, have either small portions or the 3 year olds are pretty big if they are not full after eating a burger with fries.
Wont be visiting anytime soon!
To Maragaret in Eastbourne,.... have another drink.
David, Warsaw, Poland
Few outside Paris but in France there is KFC (Burger King closed in 1998), Paris has some of busiest and most profitable in Europe.
Paris KFC Les Halles is the busiest outside USA and China.
Vincent, Paris , France
Cronan, London, UK says:
'It's just food, folks. If it were bad for you it would be illegal.'
Tell that to the smokers of the world as they die.
Mr Mortishead is not factoring the risk element in MRM industries (Mechanically Recovered Meat). Mad Cow Disease, like HIV, hasn't gone away. Caveat emptor
Daniel, Hereford, England
I noticed this when visiting Narbonne during the winter six and a half years ago. The only eating establishment in the centre of town open in the evening was McDonald's. As in other countries, the long opening hours and low prices make it popular. That French people are 'anti-American' is a myth.
Paul, Coventry,
Having lived in the USA, UK and now France I can tell you that the French McD(as you may expect) is far superior to US & UK. The dessert menu is a revelation and the burger with mustard sauce and "ciabatta" type bread is far superior to other similar food outlets. And, I'm not a fan of fast food!
kr, villefranche, FRANCE
Re: Margaret - "Eating a burger a month produces the same carbon footprint as driving a Landrover 24000 miles"
Where does this come from?
Is it 1 burger in 1 month? 12 months? every month for life? How many miles for your NORMAL shopping / cooking? - more or less than 24000? This is Meaningless!
Mike, Wiltshire, UK
I think French eating habits are definitely changing for the worse.
I was recently in Normandy and was surprised that the traditional french lunch had been usurped by baguettes filled with Kebab meat (rotary meat).
There were massive queues at all the street vendors serving this fast food.
Jason, London,
I don't disagree that the French are getting a taste for "Le Mackie-D" however the McDonalds in Arles in Provence has just closed down due to a lack of business.....
Clearly, just a regional thing!
Mind you, the menu choice en-francais is far better there than the slop served up in the UK!
Slim, Steyning, West Sussex
i bet it has to do with american tourists who are eating mcrubbish in france.no self respecting french will eat that rubbish.come on surely not
medi, babol,
Margaret is exaggerating but a mcdonalds does increase your carbon footprint:
1 burger a month = 12 burgers a year
2000 miles/burger
Take into account the air miles, the methane emissions from cattle and the fact that rainforest is cut down to graze cows and there you have it! Not 24k but close!
Tom, bedford, uk
A classic case of racialization through animal depiction. The British, and American press has for centuries depicted anyone they wish to put down as a monkey or ape (Irish, Black, Mexican). This depiction will fly below the radar, but it is eerily similar to Anti-Irish and Anti-Black caricatures ...
Miquelon, TORONTO, Canada
Margaret from Eastbourne is correct. Overweight people, statistically more likely to consume a burger a month, get out of breath more quickly than the physically fit. The resulting acceleration of inhalation and exhalation increases the levels of Oxygen converted and emitted as Carbodn Dioxide.
andrew buckley, london, uk
Nice piece of doublespeak: Britain exports meat, Brazil sends "animal carcases" to Europe.
Rosemary , Germany,
I don't know how McDs have got away with calling it a "meal" for all these years.
Not even a 3 year old would be full after eating a bag of fries and a burger.
John , Taipei,
There is no valid scientific evidence that food bought at McDonald's is inherently bad for you. Eat a balanced diet, with more fruit and vegetables than meat, and you'll be fine.
It's just food, folks. If it were bad for you it would be illegal.
To Margaret, where is your evidence?
Cronan, London, UK
Did it ever occur to you that the huge rise in Burger sales in France, is due to all those illegal immigrants popping in for a Big Mac while waiting for the next ferry to England.
Mike, Berlin,
We have lived in France for the last few years and have noticed since Mcd's went there, even the lovely petite French are now getting fat!
Sue,Poole
sue case, poole, England
The only good thing about McD's in France are the loos. A lot of French eateries and service stations think that a hole in the ground is acceptable, whereas McDonald's has a proper toilet. I always use them when caught short in La Republique.
Nobby Clark, Perth,
"Eating a burger a month produces the same carbon footprint as driving a Landrover 24000 miles"
Good news. I have given up burgers so that more than offsets the 6,000 miles I do each year in my Land Rover.
Nobby Clark, Perth,
Having eaten in plenty of French Cafés I am certain that McDonald's success in France is down simply to it serving tastier, fresher food than the competition. Sure the elites dine well but the French mass market is no more discerning than that the British (French supermarkets are proof of this).
Huw Sayer, Norwich, England
No-one forces you to eat anywhere you do not want to eat. What's the point of commenting that McD's isn't food or isn't good for you.
Don't eat it! Also, I would like to see the source that eating one burger a month produces the same footprint as driving a Landrover 24000 miles?
Ed, London,
A large reason for McDonalds' success in France is that it has no competitors. KFC, Burger King, Pizza Hut etc. have no or almost no presence in the country. The main competition is in the form of a tiny Belgian company called Quick. McDo dominates the fast-food market in which there are few others.
de Villiers, Avignon,
"Eating a burger a month produces the same carbon footprint as driving a Landrover 24000 miles"
What utter tosh, as long as people keep making statements like this I will continue to laugh at the green movement and their inability to understand science
Tony, Manchester, UK
An American would be surprised by the quality (and high price) of the food at French McDonald's. The coffee is good too. The main disappointment is that our local McDo only opens at 9:30 and so a cooked breakfast remains hard to find.
Roger, Cahors, France
Eating a burger a month produces the same carbon footprint as driving a Landrover 24000 miles. On this basis alone, fast food outlets should have to pay the same green taxes which are being levied on car drivers.
margaret, eastbourne, UK
"McDonald's, which operate on enormous economies of scale and can offer a keenly priced meal."
It's all in how one defines the word "meal." Yes, you can eat McDo and not starve, so it must be food -- but that doesn't make it good or good for you, much less "cuisine."
Jim Houghton, Los Angeles, CA, USA