Europe

No more Big Macs

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In the Geo Quiz we’re looking for an island nation where all three McDonald’s restaurants will close at the end of the month. And besides being destined to be Big Mac free by Sunday, it’s also famous for its glaciers and fjords, and, well, ice.

McDonald’s is to close its business there because the country’s financial crisis has made it too expensive to operate its franchises there. 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.

And the country losing its Golden Arches soon is Iceland.

Svein Gudmarsson is a reporter with Iceland’s state radio.

• BBC coverage
• The Guardian: McDonald’s to quit Iceland

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JEB SHARP: And the country losing its golden arches this weekend is Iceland.  Svein Gudmarsson is a reporter with Iceland’s state radio.  Tell us exactly why McDonalds is closing in Iceland?

SVEIN GUDMARSSON:  Well, the reason is simple.  Since last year, the Icelandic krona or currency has devaluated so much that the cost of importing the goods to make the MacDonald’s hamburgers and chips and whatever they use to make them, has almost doubled.  So the regulations of the MacDonald’s stipulate that their franchisee has to import everything, and he cannot compete any more with the local hamburger restaurants.

SHARP:  They would rather insist that everything is imported than keep their restaurants open?  Do you understand the background to that?

GUDMARSSON:  I think it has something to do with certificates that producers of meat and cheese and so on have to have, from MacDonald’s.  And apparently Icelandic producers aren’t big enough to get these certificates.

SHARP:  So it’s some sort of standards, quality control issues.

GUDMARSSON:  Yes, that’s right.

SHARP:  So you were in MacDonald’s today.  I gather there were three in Iceland. Who was loving it in Reykjavik today?

GUDMARSSON:  Well, I went early today like you said to our MacDonald’s restaurant nearby where I work, and it was absolutely packed.  There were so many people buying hamburgers there, and of course, the restaurant is closing down on Sunday.  So apparently word had spread that this would most likely be the last MacDonald’s trip here in Iceland.

SHARP:  And what do you hear from the owner of the franchise there in Iceland?  What’s he going to do next?

GUDMARSSON:  Well, he’s quite upbeat actually, because he is going to establish a new restaurant with a different name called Metro.  And he’s saying that now he can finally buy meat and cheese and buns and whatever from a local producer, which costs less, and he hopes that the quality will be better.

SHARP:  Now if burger chains in Iceland will be using more local sources for food and materials, that sounds like good news for the environment.

GUDMARSSON:  Absolutely. It is not good for environment having to transport a lot of food over long distances, when it can be grown or produced locally.  This is good also for Iceland economically, because quite a lot of money and currency left the country to buy all that stuff, which could be produced in Iceland.  Instead, this money now goes to local farmers, and even the money that the owners of MacDonald’s in Iceland had to pay for the franchise will stay in Iceland, which is definitely good news for our country that is quite starved with foreign currency.

SHARP:  So not necessarily good for your health eating the burgers, but better for the health of the planet.

GUDMARSSON:  You’re spot on.

SHARP:  And just a point of language, do people say “Big Mac” in Iceland, or was there a colloquial?

GUDMARSSON:  Yeah, I think Big Mac has always been called just simply a Big Mac, but the Quarter Pounder, or Royale, as I think it is called in the US, was always called “góður borgari” which means just, “a good citizen.”  It was actually the prime minister of Iceland who took the first bite of a Big Mac back in ’93 when the first MacDonald’s restaurant opened.  He is a very controversial figure still in Iceland.  He only left office five years ago and when he became the governor of the central bank, and was the governor of the central bank when the bank collapsed in Iceland, so now many people are wondering if he is actually going to be the one who takes the last bit of MacDonald’s.

SHARP:  Svein Gudmarsson is a reporter with Iceland State Radio.  Thanks very much.

GUDMARSSON:  Thank you.

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