McDonald’s Stores In East, North India Hit By Supply Woes, Vikram Bakshi Says

McDonald's estranged joint venture partner Vikram Bakshi said that nearly all outlets of the fast food chain in East India have been shut and several others in the north are on the brink of closure due to discontinuation of supplies by its logistics partner.

In all, there are 80 outlets that have been hit by this cut-off in supplies by Radhakrishna Foodland, a move which is seen as a fallout of the ongoing spat between the fast food major and Bakshi.

“Almost all the outlets in East India have been shut because of the move by the logistics partner, and others (in North India) are also under pressure due to the supply crunch,” Bakshi told newswire PTI, adding that a total of over 80 outlets are suffering, considering the limited stock each outlet has.

In a letter dated Dec. 20, Radhakrishna Foodland Pvt. Ltd. wrote to Connaught Plaza Restaurants Pvt. Ltd., the 50:50 joint venture between Bakshi and McDonald's India Pvt. Ltd., saying it is discontinuing the supply chain services due to reduction in volume and uncertainty of future, among others, as also non-payment of a certain additional amount.

A copy of the letter has been seen by PTI.

The otherwise massive business in the festive season for McDonald's is set to hit a bump, which will affect the food chain's revenue.

“Our long-standing logistics vendor Radhakrishna Foodland allegedly in collusion with McDonald's Corporation and their wholly owned subsidiary McDonald's India Pvt. Ltd... has decided to hold back stock paid for approximately Rs 10 crore by us,” Bakshi said in a letter to landlords and developers of his outlets.

He further wrote: “While the American company and its subsidiary, MIPL, may have with their usual mala fide and malicious actions managed to give CPRL a temporary business setback at the end of the year and during this high sale festive season, yet we have made and are making alternative arrangements and shall be back to serve our customers very soon.”

Bakshi has been at loggerheads with the fast food chain over the management of CPRL after he was ousted from the post of MD of the McDonald's franchisee in August 2013.

McDonald's India in August terminated the franchise agreement and had asked CPRL not to use its brand system, trademark, designs and its associated intellectual property, among others.

Bakshi had moved the National Company Law Tribunal following termination of the licence by McDonald's India.

When contacted, the McDonald's India spokesperson said: "We were informed that their vendors have stopped delivering supplies... This is between CPRL and their vendors, not MIPL.