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McDonald's Further Growth in Russia

08 April 2013
Meat & Livestock Australia

RUSSIA - The fast food sector in Russia is set for further growth, with McDonald’s planning to open a further 150 stores in the country over the next three years, according to the company’s president for Russia and Eastern Europe, Meat and Livestock Australia reports.

Turnover in the fast food industry in Russia is tipped to have reached US$6.4 billion in 2012, with the fast food industry providing 45% of overall growth in the food catering market in Russia according to the market analysts GIRA.

The Russian catering/food service market has reportedly registered annual average growth of 24% over the past 11 years.

McDonald’s opened 46 restaurants in 2011 and 37 in 2010, with the fast food chain estimated to have had 311 stores in Russia at the beginning of 2011.

Although an expansion in the fast food industry would seemingly indicate an increase in demand for beef, Russian per capita beef consumption is unlikely to grow significantly.

It is estimated by GIRA that Russian per capita beef consumption fell from 18.3kg in 2011 to 17.9kg in 2012.

Restricting growth in beef consumption has been declining domestic production and beef imports that are limited by tariff rate quotas (TRQ) - consequently limiting the overall amount of beef available to be consumed in the Russian market.

Positively for beef imports, as domestic beef production falls, a large portion of the beef volumes required by the processing industry will continue to be imported, with imports of beef set to be the only meat Russian import category that increases in coming years.

However, as domestic production of chicken continues to increase, it is likely that processors will seek to replace beef with poultry.

Australian exports of beef to Russia have been sluggish in early 2013, as South American product remains more competitive, with first quarter shipments down 52% on 2012 levels, at 3,540 tonnes swt.

Exports of frozen whole cuts such as silverside/outside and chuck and blade, the type of product likely to be heading to further processing into burgers for the fast food industry, have slowed on 2012 levels.

TheMeatSite News Desk

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