The Reason McDonald's Is Planning To Exit Kazakhstan After Just 6 Years
Mcdonald's has a reputation for being absolutely everywhere, but Kazakhstan looks like it will now be one of the few exceptions to prove the rule. Before people were joking about a Starbucks on every corner, McDonalds was the original symbol of chain restaurant dominance. According to the company, more than 38,000 stores operate in over 100 different countries, with a worldwide footprint that has led to the development of many international menu items. The global focus of McDonald's has only gotten stronger in recent years, with Yahoo noting that they planned to open 1,800 new locations abroad in 2022.
McDonald's original move into Kazakhstan was part of a meaningful trend over the past 30 years. As NPR reports, the American hamburger giant expanding into Russia and other former Soviet territories was seen as a clear rebuke of cold war tensions and as a symbol of those nations embracing new, more open societies. But this year has marked a startling reversal, where the heightened tensions over the Russian invasion of Ukraine led McDonald's to abandon the country and sell its stores to be rebranded under a new name by a local coal magnate. Now McDonald's is retreating from Kazakhstan for similar reasons.
The war in Ukraine has disrupted meat supplies in Kazakhstan
Despite pledging to leave Russia earlier this year, McDonald's has tried to maintain its presence in other neighboring countries, including Ukraine, but the war has disrupted more than just international relations. According to Bloomberg, the local franchise owners in Kazakhstan have been struggling to find steady, affordable sources of meat as the conflict has upended supply chains. Businesses in Kazakhstan are not affected by sanctions and still allowed to buy goods from Russia, which is the nation's main trading partner, but McDonald's corporate has forbidden franchisers from purchasing Russian meat. This has left stores in Kazakhstan scrambling for supplies from Europe, but according to Reuters, they have been unable to meet their needs.
The 24 McDonald's locations in Kazakhstan had shut down temporarily just last month as they worked to find new meat suppliers, but other issues may be compounding the increasing cost of beef. The franchise owner is Kairat Boranbayev, a relative of the former President who was detained earlier this year on embezzlement charges. The fraught legal situation may be making it harder for his company to secure the kind of funding and deals that could have kept the local McDonald's going. While there are far bigger problems related to the war in Ukraine than people not being able to get a filet-o-fish, this whole saga seems to be a microcosm of the disruptions that have rippled around the food world in the wake of Russia's invasion.