McDonald's Drops Heinz: Fast Food Giant To Sever Ties With Ketchup Company After 40 Years

 @AndrewBerry1
on October 26 2013 1:44 PM
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McDonald's will no longer use Heinz Ketchup in their restaurants after 40 years of doing business together. REUTERS

The relationship between McDonald’s Corp (NYSE: MCD) and H.J. Heinz Company (NYSE: HNZ) is about toend, as the fast-food giant has announced it will sever ties with the condiments company after more than 40 years of doing business together.

“We value the relationship we’ve maintained with Heinz for more than 40 years,” McDonalds said in a statement. “As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time.”

According to Reuters, Heinz was purchased for $28 billion by Warren Buffett’s Berkshire Hathaway (NYSE: BRKA) and an investment fund with ties to 3G Capital back in June. Bernardo Hees -- the former CEO of Burger King Worldwide (NYSE: BKW), McDonald’s fast-food rival -- is now the new CEO of Heinz, which is believed to be the reason why McDonald’s is cutting ties with the company.

“We have spoken to Heinz and plan to work together to ensure a smooth and orderly transition of the McDonald’s restaurant business, and are confident that there will be no impact to our business, our customers and our great tasting food at McDonald’s,” the Oak Brook, Ill.-based company said.

The change will be felt more in overseas markets, as McDonald’s only uses Heinz in two markets in the U.S. -- Pittsburgh and Minnesota, the Pittsburgh Post-Gazette said.

As Reuters reports, ketchup packets at McDonald’s restaurants in the United States usually only say “fancy ketchup” and the ketchup dispensers aren’t labeled.

Miguel Piedra, Vice President, Global Communications and Culture at Burger King, told Reuters that the company has been a Heinz customer for “decades” and uses their products in 80 percent of their markets globally.

"As a matter of policy, Heinz does not comment on relationships with customers," said Michael Mullen, Senior Vice President of Corporate & Government Affairs at Heinz.

“All our food-service customers globally remain valuable to the company and are an important part of what has made the H.J. Heinz Company what it is today,” Mullen said. “We continue to operate respecting every customer while upholding the high level of confidentiality and business ethics that the H.J. Heinz Company has built with our business partners over the years.”

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