Icelanders can't afford Big Macs anymore

McDonald's is to close its business in Iceland because the country's financial crisis has made it too expensive to operate its franchise. The fast food giant said its three outlets in the country would shut - and that it had no plans to return.

Besides the economy, McDonald's blamed the "unique operational complexity" of doing business in an isolated nation with a population of just 300,000. Iceland's first McDonald's restaurant opened in 1993. The franchises are run by a firm called Lyst, with owner Jon Gardar Ogmundsson saying the decision was "not taken lightly". He said that the restaurants imported the goods from Germany, but that costs had almost doubled, with the falling krona making imports prohibitively expensive.

Mr Ogmundsson said the restaurants had "never been this busy before... but at the same time profits have never been lower". "It just makes no sense. For a kilo of onion, imported from Germany, I'm paying the equivalent of a bottle of good whisky," he added. He now plans to run the restaurants under another name so that he is able to buy cheaper Icelandic products.

Iceland's banks collapsed at the height of the global credit crisis - wrecking the country's economy and forcing it to rely on an $10bn (£6.1bn) international aid package.

David McWilliams discusses the pullout here.

Ramsay's own kitchen nightmare

Profits at Gordon Ramsay's UK restaurants fell by 87% in the last year, forcing the chef to inject £3.5m of his own money into the business. His father-in-law and partner Chris Hutcheson also pumped in £1.5m to help cope with mounting debts and tax bills.

The latest accounts showed that in 2007-08 pre-tax profits plummeted £3.05m to £383,325. At the same time, net debt soared from £4.06m to £9.48m.

The closure of two of Ramsay's London restaurants alone accounted for a £9.5m drop in revenue. The Savoy Grill was shut because of refurbishment of its host hotel, while the Connaught's lease expired. A third venue, La Noisette, ceased trading in January this year, and was said to have been a "consistently underperforming site".

Ramsay has told how he had to sell his Ferrari to help raise funds, blaming the company's problems on his own over-ambition. Some 25 staff also lost their jobs as part of the restructuring efforts.

Thousands of jobs in the food industry at risk

Today, a body representing food and drink companies says 2,000 jobs have been lost in the industry so far this year and 'many thousands more' are at risk. Food and Drink Industry Ireland (FDII), part of employers' group IBEC, said firms' competitive position had been damaged by high business costs and the sharp fall in the value of sterling.

It called for Government action to reduce business costs, particularly energy. The body also urged the Government to seek EU approval to set aside its rules on state aid in order to provide grant aid to firms hit by the fall in sterling. FDII also wants an export credit scheme with a state-backed guarantee.

McJobs back on the menu

Sean Poulter in the Daily Mail writes on how jobs in McDonald's are in demand again.

In the UK, fast food giant McDonald's is being swamped by more than 2,200 job applications every day, including from bank workers, graduates and teachers. The level of applications suggests the stigma surrounding the 'McJob' has been swept aside by people who are desperate for work and an income.

Among the few sectors that are bucking the recession and rising unemployment are fast food chains and some supermarkets. While these sectors can provide useful, flexible jobs and income, they are not the international wealth creators such as manufacturing and financial services that will drive the UK out of the economic mire.

McDonald's said that it is currently hiring 140 people a day to flip burgers, cook fries, serve customers and run its restaurants. In the past month alone it received 305 trainee manager applications from people with a wide variety of backgrounds in finance and banking, education, hospitality and the retail sector.

David Fairhurst, senior vice president McDonald's UK & Northern Europe, said: 'Given the current levels of unemployment, it's no surprise that we are attracting thousands of applications each day. We are hiring up to 140 people each day, and those employees are choosing to remain with us for considerably longer thanks to the range of opportunities we offer.'

Mcdonald's has struggled to overcome a negative stereotype of the jobs it offers, which have been labelled in the past as the 'McJob'. The Oxford English Dictionary currently describes a McJob as 'an unstimulating, low-paid job with few prospects, especially one created by the expansion of the service sector'. Mr Fairhurst has slammed this definition as 'out of date and insulting' and has campaigned, unsuccessfully, to have it changed. He said: 'The current definition is extremely insulting to the 67,000 people who work for us within the UK.

Source

Zero Coca-Cola in Venezuela

Venezuela has banned the sale of the calorie-free Coke Zero, calling it harmful to people's well-being. "The product should be withdrawn from circulation to preserve the health of Venezuelans," said Health Minister Jesus Mantilla. Mr Mantilla did not say what the specific problem with Coke Zero was. Coca-Cola said it would stop production of the drink in the country, but also added that Coke Zero contained no harmful products.

Venezuela's President Hugo Chavez is a vocal critic of the US, and is in the process of nationalising much of the economy. Venezuela is the world's ninth largest oil producer and has already ationalised much of its oil and gas sector since Mr Chavez came to power. Recently he took over its third largest bank, Banco de Venezuela.

Domino's to get a bigger pizza the action!

Recessions are not bad for everyone. Some industries thrive in a downturn. Many qualms and quibbles go out the window as needs triumph over desires. Fast-food outlets are a case in point. Their food is generally seen as being 'recession-proof'.

Yesterday, the London-listed arm of Domino's Pizza announced it is planning a sizeable investment in Ireland in order to cope with growing demand for its products here. The company's plans include 10 new Irish stores in 2009. This follows on its seven new outlets last year. Each new store creates an average of 30 jobs.

The company, which operates the franchise for the global brand in the UK and Ireland, currently has a commissary facility in Naas, Co Kildare. It was built for €15m and produces and distributes pizza bases and other products to the chain's stores across Ireland.

Domino's Pizza UK & Ireland said yesterday that full-year sales jumped 18.4pc last year to £350.8m (€397m), while pre-tax profit rose 24.7pc to £23.4m (€26.5m). Like-for-like sales in 450 outlets were up 10pc. At the end of December, the firm had 553 stores between the UK and Ireland, with 41 in the Republic of Ireland and 13 in Northern Ireland. Its store in Tallaght is one of the busiest Domino's outlets in the world.

Four Star Pizza, the wholly Irish owned franchise based pizza company, announced last month it will create 200 jobs over 2009, with the opening of ten new franchise locations here.

You can't use that name here, Bud!

Beechwood-aged or not, an EU court decided today that Budweiser-brewer Anheuser-Busch should not have rights to the "Bud" brand throughout the 27 nation bloc. It is a victory for the Czech brewer Budejovicky Budvar, which said it had registered the name in France, Austria and former Czechoslovakia in 1958. Anheuser will now have to rely on registering its trademark in each individual member state. It said it already had trademark protection in 23 of the EU states. Losing the right to a community-wide trademark can be a major blow for a firm, as gaining European Union-wide rights avoids the lengthy and costly process of going through the systems in individual countries and gaining separate trademarks in each of these.

It is the latest stage of a long-running trademark dispute between the two brewers. Budejovicky Budvar was founded in 1895 in Ceske Budejovice, which was known as Budweis by its German-speaking inhabitants. Beer had been brewed there since 1265. Budweiser was first produced in St Louis in 1852 and was America's first national beer brand. The name was taken because it was familiar to the German founders of the company.

With a consumer spending slowdown across the United States and Europe, it is not yet clear whether Anheuser-Busch will appeal today's ruling.

Call for new advertising rules in the UK

A leading UK heart charity is today calling for a ban on junk food advertising on television before 9pm, claiming manufacturers are exploiting family shows to bombard children. Adverts for foods high in fat, sugar and salt are banned from the screen during children's programmes. But, in a new report published today, the British Heart Foundation (BHF) says as few as one in 20 shows most watched by children is covered by the ban and that most of children's viewing (68.9 per cent) is outside children's programming and around shows such as The X-Factor, Kids do the Funniest Things and the soap Emmerdale.

The report, prepared by the Food Commission for BHF, also claims advertisers have resorted to pressuring 'bewildered' parents with misleading health claims in the battle for a share of the lucrative breakfast cereal and lunchbox market. Companies use 'sophisticated marketing techniques to manipulate parents into thinking they are buying healthy food for their children', it states. 'It is clear that some food companies are preying on parents' concerns actively to market children's food that is high in sugar, fat and salt,' said BHF chief executive Peter Hollins. 'They are manipulating legislative loopholes to find new tactics to entice children and their parents.

The report highlights several products that, it claims, show how parents are manipulated. These include:

• Kellogg's Coco Pops Cereal and Milk Bars says it is 'the best choice for a lunchbox treat', with images of grapes and wholemeal bread. 'In reality it contains a massive 41g of sugar per 100g and uses adult guideline daily amounts, which could further mislead parents,' says BHF.

• Dairylea says it has 'no artificial colour, flavours or preservatives added'. 'But just one Dairylea Bite contains nearly a third of a child's daily recommended maximum saturated fat intake.'

• A Nestlé and Nesquik magazine ad showing children eating Cheerios and sucking milk through a Nesquik flavoured Magic Straw claims to be 'full of goodness' helping to 'maintain strong healthy bones'. Yet with the mix of Cheerios and strawberry-flavoured milk a child 'would consume 37.4g of sugar,' says the report.

• Burger King Aberdeen Angus Mini-Burgers with Cheese is advertised with a 'warrior' mother saying: 'The lunch battle is over.' Yet there is more than a fifth of a child's daily recommended maximum saturated fat intake in the product.

• KFC Deluxe Boneless Box TV advert shows children who, after a family meal of KFC, volunteer to do the washing-up. This, says the report, uses the 'emotional insight' technique by sympathising with difficulty in getting offspring to do chores. Yet it says there is more than half of a child's daily recommended maximum salt intake in a serving of Popcorn chicken.

Manufacturers denied the findings. A spokesman for Kraft who produce Dairylea cheese said: "Parents tell us that no artificial ingredients are important to them, so that's what we highlight."

"Call to ban junk food ads during 'family' TV", The Observer, 14.12.2008.

Frozen food is cool in everyway

According to this morning's Guardian UK shoppers are cancelling their orders of organic food and are abandoning bottled water in favour of the tap. Premium-label heat-and-eat meals are left on the shelf, along with exotic fruits airlifted in from Africa. There is a new air of austerity in the aisles of supermarkets and a back-to-basics recession diet - which has made frozen food cool again. Until recently many shoppers regarded frozen food as a rather ghastly, downmarket option. Fresh was best, and stores cut back on freezer space to make room for more chilled products. But now frozen food is back in vogue as shoppers search for value and try to cut back on waste. Sales of Sainsbury's frozen peas and roast dinner platters have more than doubled since last year and its frozen garlic bread is ahead nearly 40%. The biggest increase has been sales of frozen raw prawns - up 400% year on year. According to TNS Worldpanel market research, the fastest growing grocers are discounters such as Aldi and Lidl - which devote more space to frozen food than their bigger rivals.

Brian Young of the British Frozen Food Federation puts much of the decline in frozen-food sales down to snobbery - and reckons Marks & Spencer started the rot. "M&S led on chilled food, particularly ready meals, and made great margins. But prices went up because there was so much wastage. The packs were open and visible and people believed it was better. The other supermarkets followed. It was just a form of snobbery, and that is now fading away."

A cheesey bailout

While the rest of the world seems to be bailing out banks (and even car companies), Italy is coming to the rescue of parmesan cheese. In an effort to help producers of the cheese, often grated over spaghetti and other pastas, the Italian government is buying 100,000 wheels of Parmigiano Reggiano and donating them to charity. Even though demand for parmigiano is strong in Italy and abroad, producers have found it difficult to make money for years, putting the future of Italy's favourite cheese at risk.

Economists might suggest actually letting a few producers fail, that way supply shrinks, prices rise, and the producers left will become more profitable... or maybe that's too simple a solution.

Irish pork industry in tatters for Christmas

It is now estimated that Irish pork contaminated with toxic dioxins could have been exported to as many as 25 countries, including France and the Netherlands according to government officials. While the recall of all domestic pork products from shops, restaurants and food processing plants is no doubt a cause of annoyance for consumers, the fallout of this for the Irish pork industry coming up to the lucrative Christmas market cannot be overestimated. The Irish Exporters Association said the total exports of pig meat and related added value products such as pizzas, pies and sandwiches containing pork was about 750 million euros. It said 63% of this went to the UK.

While the sales will eventually pick up again, the timing of this incident could not really have been any worse. The consequences of the recall are likely to be very severe. The recall itself is likely to cost tens of millions of euro but the damage to the pork industry at home and abroad could be even more significant. Within 12 hours of the recall being announced, the story was running on in excess of 400 news websites all over the world, from New Zealand to California.