Big Mac pays out 283m for foothold in pizza land

The Guardian

23 March 1996; By John Glover in Milan

AMERICAN Fast-food firm McDonald's is continuing its campaign to ensure that no one, anywhere, who fancies a Big Mac need ever go without. After heading aloft with the MacPlane, an aircraft painted in company colours and with waitresses instead of stewardesses. McDonald's has finally burst into pizza land. Under a letter of understanding signed this week, McDonald's will buy the 80 restaurants belonging to Burghy, Italy's only national burger chain. The price of the operation is understood to be in the region of 200 bililon lire (83 million) - about the same figure as Burghy's annual sales.

McDonald's, which boasts it opens three restaurants a day worldwide, has never really got its teeth into the Italian market. Since its arrival in the country in 1985 it has succeeded in opening only 38 outlets, with 1995 sales of 107 billion lire. About half of those have opened in the past 18 months, following the arrival of new management and a strategic link-up with the Agip chain of filling stations. This made its purchase of the Burghy chain a strategic necessity and helps account for the generous price paid. The difficulties McDonald's has encountered makes it one of the more illustrious victims of Italy's famed burocracy, capable of halting in its tracks even an agressive 12 billion a year multinational by denying it the necessary licences to open. Burghy, with its local contacts, had more luck with the bureaucrats.

The seller is a company belonging to Luigi Cremonini, one of Europe's largest meat packagers. Cremouini will continue to supply the meat for Italy's Macs for the next five years and will be granted a shot at supply contracts abroad.
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