Mcdonald’s pulls claim 95c in dollar stays in NZ

McDONALD’S NEW Zealand is withdrawing a longstanding claim that 95 cents in every dollar spent at one of its restaurants stays in New Zealand.

After questioning by Sunday Star-Times the global fast food giant has agreed it cannot sustain the claim, after paying a $154 million dividend to its US parent in the year to December 31, 2011.

A spokesman said the statement would be removed from McDonald’s NZ’s online corporate responsibility statement ‘‘for the time being’’.

Spokesman Simon Kenny indicated a statement using 90 cents in the dollar could be more appropriate, after the unusual dividend payment.

‘‘We’re updating the website with 2012 details over the next few weeks so we’ll look at a way to best explain the sentiment of that statement,’’ Kenny said.

The dividend consisted of multiple years of retained earnings, or profits, but that is not the only money McDonald’s NZ pays to its US owners.

Around $55 million was paid in each of the 2010 and 2011 financial years, including interest on intercompany loans, service fees and fees for the use of the McDonald’s brand.

McDonald’s NZ had been reinvesting its profits locally up until 2011, when its US parent asked for the retained earnings to be paid out. As the funds had been reinvested in local restaurants and capital items, the money had to be borrowed from Bank Mendes Gans NV, which manages a lot of the company’s international finance.

McDonald’s was not prepared to disclose exactly how much it makes across its counters each year. However, the total size of the New Zealand fast food restaurant market is estimated to be $1.7 billion and McDonald’s market share is under 50 per cent of that.

The $200m sales figure shown in McDonald’s NZ’s 2011 accounts, filed with the Companies Office, include fees from franchisees and sales from the 20 per cent of outlets it operates directly. It does not include all the sales made by its franchisees.

The dividend payment more than doubled McDonald’s NZ’s liabilities to $301.9m and will similarly boost its tax deductible interest expense in coming years.