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OPINION: Burger buy-out

What do you get when you mix ground beef with coffee and crullers? You get the world’s third largest purveyor of artery-hardening, cardiac-arresting fast food snacks.

What do you get when you mix ground beef with coffee and crullers? 

You get the world’s third largest purveyor of artery-hardening, cardiac-arresting fast food snacks.

You also get an unexplained sense of national insecurity as simple Canucks gather in small groups, at Timmy’s of course, to discuss the implications of this merger.

Many donut dunkers are befuddled by the purchase of the Canadian icon of brewed beverages and fritters, Tim Hortons by the American icon of greasy foods, Burger King.

At the highest level this is a business deal and nothing more, a financial arrangement engineered for profit, tax evasion and world fast food domination.

Tim Hortons sold for $12.5 billion and is the sparkling, new jewel in the King’s somewhat tarnished crown.

Canadians buy a lot of Tim’s coffee – he rakes in 27 per cent of all fast food spending in Canada, more than double all the others combined including MacDonald’s and Starbucks.

But more than that, Tim Hortons customer loyalty is legendary and many consider the double-double to be a part of our national identity.
Burger King would love to know how to do that.

Canadians have a habit of attaching ourselves to well-known national brands such as Molson or Labatt’s but this blind loyalty is misplaced.

These aren’t national companies any more even though they shamelessly flaunt home-grown Canadian values in their advertising and promotion.

And now, all those quaint, little vignettes about hockey rinks, cold winter mornings with Grandma and Grandpa and the take-out coffee, are no longer authentic either.

However, sincere or otherwise, the new owners hope to capitalize on that intangible quality that has made Tim Hortons the national cup of choice.

Burger King is now located in a hundred countries worldwide but it faces some business challenges, including a growing debt which Timmy’s healthy bottom line can fix.

Tim Hortons hopes for a mutually beneficial arrangement – they intend to use the King’s international success to launch a global coffee and cruller cartel.

Imagine the joy experienced by international travelers as they sip on a dark roast and choke down a few Timbits in Kuwait or the Cayman Islands or Guam.

The new owner is a Brazilian private equity firm called 3G, which will be calling the shots with a little help from fellow investor, billionaire Warren Buffet.

You might remember 3G as the company that bought Heinz and then shut down the Leamington, Ontario ketchup factory, putting 740 out of work.

This company is run by young, aggressive executives who have a hiring philosophy called PSD – an acronym for poor, smart, deep desire to get rich.

They favor a stark, no-nonsense cost cutting approach to business with strict measures to streamline operations.

But  they are successful – Burger King’s profit margin has tripled since they took over, partly due to job cuts and the sale of franchise locations.

Still, they are seeking Tim Hortons magic formula to generate the good will and customer loyalty they need to succeed further while Tim just wants to go global.

The big question is, will selling out to ruthless Brazilian financiers to become part of a global fast-food powerhouse change that clean cut Canadian image?

Even more importantly, what will happen to the donuts and the coffee?

Expect to see fewer raisins in the dutchies, less filling in the jam busters, a reduction in sprinkles on the donuts and possibly even apple-less fritters.

Who knows how they may tamper with the brew?

One consultant predicts that Tim will never know what hit him - the coffee-swilling, donut-snarfling public had better beware. Coming soon to a location near you.


 

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