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MCDONALD'S

McDonald’s accused of huge French tax dodge

Several labour unions and a charity have formally accused McDonald's of cheating the French tax man to the tune of up to €700 million.

McDonald's accused of huge French tax dodge
McDonald's stands accused of dodging taxes to the tune of €1 billion. Photo: _Skynet/Flickr
The fast-food giant stands accused of siphoning off European earnings through a Luxembourg unit over a five-year period since 2009. The move is alleged to have saved McDonald's €1 billion from across its European stores.
 
McDonald's France is the biggest earner of the franchise for Europe – bringing in system-wide sales of €21.6 billion between 2009 and 2013. Of this, McDonald's France owes an estimated €386.2 to €713.6 million in unpaid taxes to the French tax man.
 
The damning allegations come from the European Federation of Public Service Unions and The Service Employees International Union – which released a lengthy report titled "Unhappy Meal".
 
The report added that France could levy additional penalties of up to €570.9 million. 
 
It stated that McDonald's outlets in Europe were channelling intra-group royalty payments into Swiss and Luxembourg subsidiaries, thereby paying less value-added and corporate profits tax than they would in France.
 
The unions, together with UK-based anti-poverty campaign group War on Want, called on the European Commission to launch an investigation. 
 
"It is shameful to see that a multi-billion euro company, that pays low wages to its workforce, still seeks to avoid its responsibility to pay its fair share of much needed taxes to finance public services we all rely on," EPSU General Secretary Jan Willem Goudriaan said in a statement.
 
"Rather than supersizing profits and minimising taxes, McDonald’s should change its recipes to ensure that Corporate Citizenship is at the core of its menu."

 
The topic made headlines in January 2014, after French magazine L'Express revealed that tax officials already suspected the burger chain of tax avoidance in France.
 
"The loss for the French state is likely to be several hundred million euros," the magazine said at the time.

It added that French tax authorities searched McDonald's main office in France on October 15th, 2013.

But McDonald's "firmly" denied the report, saying it complies with "applicable laws in France" and all its franchised restaurants in the country pay corporate tax in France.

"They have paid one billion euros in company taxes since 2009," the company said.

McDonald's did confirm, however, "an information request" from French tax authorities in October, 2013.

France has over 1,300 McDonald's stores – the second highest in Europe after Germany. The chain boasts annual sales in France of just over €4.4 billion, making France the biggest earner Europe wide.
 

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MCDONALD'S

40 years of Le Big Mac: Here’s how big France’s appetite for McDonald’s has grown

It's 40 years since the US burger giant McDonald's sold its first French fries in France. Here's a look at how the French fell in love with the Big Mac although the relationship has had its ups and downs over the years.

40 years of Le Big Mac: Here's how big France's appetite for McDonald's has grown
A McManure please. Farmers protest at a McDonald's in France in 199. Photo: AFP

The French may have invented nouvelle cuisine, but it seems the dish they love more than any other is served in a square cardboard box on a plastic tray.

The first French McDonald's restaurant – or McDo as they like to call it – opened 40 years ago on September 17th 1979 in Strasbourg and 40 years on the French cannot get enough of their French fries (though, in France, they are just called fries).

To see how much the French love McDonald's you just have to look at some of the stats:

  • 1.8 million – this is the amount of McDonald meals served up in France every day. That's almost two million meals every single day. 
  • 13 percent – this is the share of the restaurant market in France – the home of fine dining – that McDonald's has.
  • 1,464 – this is the number of McDonald restaurants currently in France, that's more than any other chain. The company aims to expand this by 300 – 400 in the next ten years. 
  • 74,000 – this is the number of people employed either full-time or part-time by the company in France. 62 percent of the team are less than 25 years old. 
  • 2nd – France is the second biggest market for McDonald's per head of population after the United States. 
  • 1st – the biggest McDonald's restaurant in the world is located in Disneyland Paris. 
  • €9 – is the average price of a meal in French McDonald's, making it the most expensive in the world. 

The French clearly have something of a love affair with McDonald's and it is reciprocated. When the company opened in France it was on the grounds that only French ingredients would be used, which is not the same in every country where McDonald's operates.

READ ALSO: Why do the French love McDonald's so much?

The menu has also been Frenchified.

Here they have at times sold the McBaguette with cheese and it isn't one of those plastic cheese slices, not on your life. In France, they use Camembert. You can also buy beer in French McDonald's, just in case you need a little kick with your breakfast McMuffin. 

In France there have been times when residents have protested against McDonald's closing or even demanded a new one open in their town.

Employees fighting to keep their McDonald's open in a suburb of Marseille said their restaurant had become the heart of the community, offering internships and jobs to people while providing a safe space for birthdays or meeting friend.

In a community in northern France a Facebook campaign garnered support among thousands and led to a street protest demanding a McDonald's open up in the area.

Facebook

However, for as much as the French love McDonald's, they also love to hate McDonald's. The relationship has had its bumpy moments.

For decades, McDonald's was the brand French people loved to hate.

From the 1970s it was accused of being the exporter of “mal bouffe” (“bad food”) to the land of fine dining, blamed for introducing millions of French people to high-calorie American fast-food.

It was also resisted as a symbol of US economic and cultural imperialism, particularly by leftwingers, in a country that remains suspicious of globalisation — and more eager than most to defend its own language and culture.

French farmer and one-time presidential candidate Jose Bove built a political career through his opposition to McDonald's which saw him trash a restaurant in the south of France in 1999.

French farmers raided the building site of the McDonald's in Aveyron and demolished it. They had announced their intentions in advance and invited spectators along, offering a Roquefort-tasting at the same time. It was in protest at the Americafication of France

“Roquefort d'abord McDo go home” (Roquefort first, McDo go home) read a slogan daubed on the trashed McDonald's. 

Support for the farmers grew and led to more protests at McDonald's across the country, including some where manure was deposited on the restaurants tills and floor.

The protest outside a McDonald's in Toulouse in 199 saw people turn up with traditional French dishes in protest at the American fastfood giant.

And resistance to the golden arches continues: a mayor on the island of Oleron in western France has famously battled to keep the company out, and the brand is still a favourite target of anti-capitalist protesters during street demonstrations.

And there have also been clashes between McDonald's and the French state at a high level.

In 2016, the French taxman sent a bill for €300 million in unpaid taxes to McDonald's France. The profits were said to have been siphoned through Switzerland and Luxembourg. 

The fast-food restaurant also caused veritable outrage with some French food purists when it had the temerity to add potatoes to its Salade Nicoise in its Italian restaurants. Was nothing sacred any more? 

But despite the run-ins the French still queue up in droves for their burgers and even with the arrival of new rivals in the battle of the burgers like Burger King and Five Guys, McDo still reigns supreme.

 

 

 

 

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