McDonald’s, CPRL’s Bakshi trade charges over food quality
29 Dec 2017
The tiff between McDonald's India and its estranged partner Vikram Bakshi got even more bitter on Thursday, with Bakshi claiming the fast food chain follows ''different standards'' for India than in other countries and has continuously ignored the food quality concerns raised by him in the past four years.
His remarks came hours after McDonald's warned that customers face health hazards if they eat at its branded outlets run by Connaught Plaza Restaurants (CPRL) in north and east India.
The ingredients used at the restaurants were not in line with the chain's global standards, a McDonald's India spokesperson said, adding that they need to be shut.
Bakshi's CPRL operates 160 McDonald's outlets in east and north India, 84 of which were shut down earlier this week after CPRL's logistics partner Radhakrishna Foodland discontinued its services over alleged non-payment of dues (See: Spat with Bakshi leads to closure of McDonald's across east, north).
"Since the termination of the franchise agreements, McDonald's India has not been able to verify if the unauthorised McDonald's restaurants operated by CPRL are complying with applicable McDonald's standards, including those pertaining to supplies, operations and safety standards and quality required for McDonald's products," a McDonald's India spokesperson said.
Bakshi said, "It appears that McDonald's have global standards for food safety and supplies, and they have a very different set of standards for countries like ours, which is a clear double standard."
The fight between McDonald's and its India partner Vikram Bakshi has been going on for a few years. The latest round of exchanges started earlier this week after Radhakrishna Foodland stopped supplies, leading to the shutdown of all McDonald's outlets in east India and most in the north.
Vikram Bakshi blamed McDonald's for the 'abrupt supply disruptions' and partnered with a new logistics vendor ColdEX. McDonald's said it had not approved the new vendor. "Using unapproved vendors for the supply chain is creating serious compliance risks to McDonald's standards for food quality and safety," it said.
Bakshi responded saying that issues concerning public health have been blatantly ignored by McDonald's with no responses, visits or actions on food safety. "It is indeed ironic that the conscience of McDonald's has suddenly awakened to quality and food safety in India, when for the past four years, CPRL has been bringing to their attention, including their CEO, Steve Easterbrook, issues of the same, without extracting a single response or visit from them," Bakshi said in a statement.
Bakshi said Radhakrishna's move was pre-planned in collusion with McDonald's and their wholly-owned subsidiary in India MIPL.
Later, the NCLT-appointed CPRL administrator asked Radhakrishna Foodland to resume the supply services as the termination was in contravention of the NCLT judgement that ordered for smooth functioning of the CPRL restaurants without any hindrance (See: McDonald's spat: supplier under pressure to resume supplies).
The fight between McDonald's and Bakshi began in 2013 after fast food giant removed Bakshi as the Managing Director of CPRL. The National Company Law Tribunal later reinstated him and also restrained McDonald's from interfering in the functioning of CPRL besides appointing an administrator to oversee the smooth functioning of CPRL.
The battle turned ugly when McDonald's India terminated the franchise agreement of 169 outlets this year in August (See: 169 McDonald's outlets face closure over dispute with franchisee). Both the parties are now fighting it out in various legal forums including NCLT, NCLAT and the Delhi High Court. Meanwhile, Bakshi continues to operate the outlets.
