Tuesday, 17 January 2012

Consumer rights watchdog targets McDonald’s

A consumer rights watchdog wants McDonald’s to list the contents of its hamburgers and it has gone to court to see that the fast-food chain does so.
The Consumer Rights Protection Society filed a lawsuit against the fast-food empire demanding it disclose all its ingredients information to customers, especially since it enjoys a lower tax rate applicable to stores and not the usual tax for restaurants.
“The McDonald’s restaurant chain deliberately violates the Russian consumer rights legislation, profiting twice from the privileged situation created by Moscow’s Arbitration Court decision,” an announcement on the organization’s website read.
McDonald’s milkshakes shouldn’t mention milk in their name, since a considerable amount of vegetable oil was contained in the product, a CRPS-backed investigation claimed.
If the court finds CRPS’ claims justified, the fast food chain will have to provide full information on ingredients, product weight and the standards it was made in accordance with.
And the list of requirement should be the same as for regular store-bought food, since McDonald’s has been “recognized as a grocery chain” by courts, the watchdog claims.
After an arbitration court’s ruling from July 2011, some of McDonald’s products are being sold as regular food commodities, which allows the company to pay VAT at the rate of 10 percent. The regular VAT rate for restaurants is 18 percent.
The McDonald’s says the lower tax rate applies only to certain products listed in respective government documents, according to a press-release published on its official website.
However, there is little chance that the corporation will lose the case. The tax scheme is absolutely legal – it is not widely used only because smaller food chains don’t have the resources to implement it given the modest revenue it will bring given their turnover, Yelena Perepelitsina, director general at consulting company Restcon, told Kommersant. And lawyer Alina Toporina from law firm Yukov, Khrenov i Partnyory believes that CRPS might have difficulties proving that one the world’s most famous chains operates entirely as a grocery store.
Back in 2007, the CRPS tried to force McDonald’s to change its take-outs scheme but courts took the side of the company.
McDonald’s representatives said they didn’t receive any notification of the lawsuit and it was also absent in the court’s database, according to an official statement sent to The Moscow News. A staff member of the Tverskoi court, where the CRPS said the lawsuit had been submitted, confirmed to Vedomosti that the document has been filed.
The company also added that information on their products’ energy and nutrition value is provided and only high quality ingredients are used. And the milkshakes frowned upon by the CRPS are produced according to a technology certified by the Russian branch of Europe’s biggest milk product manufacturer Ehrmann.

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