Russian meat giant will supply beef to McDonald’s

By Vladislav Vorotnikov

- Last updated on GMT

Miratorg will supply the beef to be used in McDonald's burger patties
Miratorg will supply the beef to be used in McDonald's burger patties

Related tags Mcdonald Russia Angus cattle Beef

Russian agricultural holding Miratorg has signed a contract to supply beef for the production of McDonald’s burgers from its recently created cluster of beef facilities in Bryansk and Kaliningrad Oblast, according to a report from the company.

According to official information, the new beef ‘cluster’ includes 43 farms with 250,000 head of Aberdeen Angus cattle. Neither side disclosed the size of the contract nor the volume of beef to be supplied. However, according to management at Miratorg, the new agreement is an important milestone for the Russian agricultural giant.

"We have been working with McDonald’s for some time, supplying chicken nuggets and patties for burgers. Now they will use our beef for the production of those patties. The recipe is a secret of McDonald’s, and we guarantee that we will raise animals without hormones and growth stimulants, on only natural feed, with care and the most stringent quality standards,"​ said Miratorg president Viktor Linnik.

The agreement should bring benefits to both companies, including enabling McDonald’s to implement its large expansion plans in Siberia in 2015.

As previously reported, this year will see McDonald’s continuing to expand in Russia, with the main focus on Siberia – the largest and low-populated area of the country. According to Khamzat Khasbulatov, general president of McDonald’s in Russia and Central Europe, this year the company should launch 50 new restaurants in Russia, including 40 in Siberia.

"We do not plan to reduce the rate of development in Siberia. In particular, we plan to launch new restaurants in Novosibirsk and Omsk in 2015. We are also considering the cities of Tomsk, Kemerovo and Novokuznetsk,"​ he said, adding that total investment this year would amount to around RUB6billion (US$100m).

In mid-2014, McDonald’s faced pressure from the Russian authorities, which organised large-scale inspections of fast-food chain restaurants in almost all regions of the country and temporarily closed some of them. It is understood that pressure was mainly connected to the decision by McDonald’s to leave Crimea, following its annexation by Russia in March 2014.

However, according to market experts the new contract with Miratorg may also signal a final reconciliation in the conflict between McDonald’s and the state, as the management of the agricultural holding is close to the country’s political elite and enjoys state support in most of its projects. McDonald’s expansion plans also add weight to the theory that the conflict has been resolved.

"The crisis made it possible to harden the business and the team,"​ said Khasbulatov. "We planned the increase [on the Russian market] anyway. It will be conducted along two lines – opening new facilities and upgrading existing ones. The company’s plans to open new restaurants remain unchanged."

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