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Burger King still open in Russia

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Burger King remains open as usual in Russia despite the brand’s owner pledging to leave more than a year ago.

Restaurant Brands International (RBI), which owns 15% of the fast-food’s franchise business in Russia, told the BBC it had “no new updates to share at this time” on its exit.

The firm said in March 2022 that it had started the process to leave Russia.

Since the outbreak of the war in Ukraine, Western companies have been under pressure to leave Russia.

Critics accused RBI of “sustaining Putin’s regime” by failing to ditch its stake in its Russian business.

RBI, one of the world’s largest fast-food restaurant companies, has cited its complicated franchise agreement for its difficulty in trying to exit the country.

The deal is a joint venture with three other partners for some 800 restaurants.

David Shear, RBI’s president, said in March 2022 that Burger King’s main operator in Russia had “refused” to shut the outlets following the first attacks on Ukraine.

But he added that the company had “started the process” to dispose of its 15% ownership stake and that it would take “some time”.

Asked by the BBC about the progress made 18 months on from the pledge, a spokesperson for the Canadian-American company said the firm had no updates.

Steven Tian, part of a team of researchers at Yale University who track what companies have done in response to the Ukraine war, argued using franchise agreements as an “excuse” was a “convenient smokescreen”. He pointed out that the likes of Starbucks had managed to terminate its deal in the country and exit.

“Saying they [RBI] want to leave but then dragging their feet is not the same as actually exiting Russia, and by continuing to do business in Russia 18 months into Putin’s invasion of Ukraine, they are sustaining Putin’s regime,” he said.

The spokesperson for RBI said the company was refusing new investment and supply chain support, and had not made any profits from Burger King in Russia since early 2022.

‘Do the right thing’

Mark Dixon, founder of the Moral Rating Agency, which campaigns against firms doing business in Russia, called for RBI to disclose what specific actions it had taken in its attempts to leave.

“[The firm] should be willing to break its agreement… It needs to accept the legal risk of doing the right thing.”

Franchising is a business method of distributing products or services. It involves a franchisor, a company that has established the brand’s name, and a franchisee, a company that pays a fee for the right to do business under the brand and to sell its products.

It has been a tool used by many Western brands in recent decades looking to enter new markets in different countries. The agreements typically span many years.

Burger King food in Russia

While Burger King remains open for business in Russia, its biggest rival McDonald’s, which corporately owned most of its restaurants, has managed to leave the country.

KFC’s parent company Yum! Brands has also sold more than 100 restaurants to a local operator in Russia, which were rebranded as Rostic’s in April.

David Bond, partner at law firm Fieldfisher, said RBI’s 15% stake meant it could not simply “dictate terms” to its fellow shareholders to require them to close Burger King branches.

He also suggested companies that franchise out their brands would be reluctant to simply walk away from deals as it could lead to “dire consequences”, including being sued for breach of contract, as well as reputational damage.

But he said consequences aside, there was nothing stopping RBI from terminating the franchise arrangement if it was adamant it wanted to do so, though added it might not result in the Burger King brand ceasing to exist in Russia.

He said the majority of “de-brands” in the country, such as McDonald’s, had been achieved through agreed sales with local businesspeople “willing to de-brand in return for the discounted purchase price”.

Who runs Burger King in Russia?

The joint venture that holds the Burger King franchise in Russia is made up of RBI and three other parties:

  • Businessman Alexander Kobolov is responsible for day-to-day operations and oversight of the 800 restaurants with a 30% stake in the business. Mr Kolobov previously told the BBC he does not have the “authority or power” to stop Burger King operations in Russia and that any closure must be approved by all investors in the business. He said his share “has always been far below control”.
  • ICU Group, a large Ukrainian investment firm, owns a 35% stake. ICU Group told the BBC it has no control over the joint venture or operations in Russia and other countries covered by the franchise deal. It said the firm was “at the final stage of exiting” the franchise agreement with terms agreed with a buyer. The company added it had abstained from managing the joint venture, investing in it and had not received any dividends since the war began.
  • VTB Capital, an affiliate of VTB Bank – Russia’s second largest financial institution which has been sanctioned by the US, UK and other European countries.

— Reports /TrainViral

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Six tonnes of cocaine found in banana shipment

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Sniffer dogs in Ecuador have found 6.23 tonnes of cocaine hidden in a banana shipment, police say.

The dogs alerted their handlers, who seized 5,630 parcels filled with a white substance that later tested positive for cocaine.

The shipment was destined for Germany, officials said, and would have been worth $224m (£173m) had it reached its destination.

Five people had been arrested following the discovery, according to the prosecutor-general’s office.

Police said they had found the massive cocaine haul during a routine inspection of container stored at Posorja deepwater port south-west of Ecuador’s largest city, Guayaquil.

The cocaine parcels had been hidden beneath crates of bananas destined for export.

One of those arrested in connection to the drug discovery was a representative of the export company responsible for the shipment, whom prosecutors said had been present at the inspection and gave officials the names of the four other suspects.

They include the managers of the banana plantation where the cocaine is suspected to have been added to the fruit shipment, as well as the driver who took the container to the port.

Ecuador has become a major transit country for cocaine produced in neighbouring Peru and Colombia, with transnational criminal gangs using Ecuador’s ports to ship the drug to Europe and the US.

Last year, Ecuadorean security forces seized more than 200 tonnes of drugs, most of it cocaine. Only the US and Colombia seized more drugs in 2023.

Gangs have caused a wave of violent crime in Ecuador, leading President Daniel Noboa to declare a state of emergency and deploy tens of thousands of police officers and soldiers in an effort to combat them.

These security forces have stopped large amounts of cocaine from being shipped to Europe.

In January, officers found the largest stash ever to be seized in Ecuador – 22 tonnes of cocaine – buried in a pig farm.

However, extortion, kidnappings and murders remain high in the Andean country.

Reports /Trainviral/

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Thailand expands v-free entry to 93 countries

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Thailand has expanded its visa-free entry scheme to 93 countries and territories as it seeks to revitalize its tourism industry.

Visitors can stay in the South-East Asian nation for up to 60 days under the new scheme that took effect on Monday,

Previously, passport holders from 57 countries were allowed to enter without a visa.

Tourism is a key pillar of the Thai economy, but it has not fully recovered from the pandemic.

Thailand recorded 17.5 million foreign tourists arrivals in the first six months of 2024, up 35% from the same period last year, according to official data. However, the numbers pale in comparison to pre-pandemic levels.

Most of the visitors were from China, Malaysia and India.

Tourism revenue during the same period came in at 858 billion baht ($23.6bn; £18.3bn), less than a quarter of the government’s target.

Millions of tourists flock to Thailand every year for its golden temples, white sand beaches, picturesque mountains and vibrant night life.

The revised visa-free rules are part of a broader plan to boost tourism.

Also on Monday, Thailand introduced a new five-year visa for remote workers, that allows holders to stay for up to 180 days each year.

The country will also allow visiting students, who earn a bachelor’s degree or higher in Thailand, to stay for one year after graduation to find a job or travel.

In June, authorities announced an extension of a waiver on hoteliers’ operating fees for two more years. They also scrapped a proposed tourism fee for visitors flying into the country.

However some stakeholders are concerned that the country’s infrastructure may not be able to keep up with travellers’ demands.

“If more people are coming, it means the country as a whole… has to prepare our resources to welcome them,” said Kantapong Thananuangroj, president of the Thai Tourism Promotion Association.

“If not, [the tourists] may not be impressed with the experience they have in Thailand and we may not get a second chance,” he said.

Chamnan Srisawat, president of the Tourism Council of Thailand, said he foresees a “bottleneck in air traffic as the incoming flights may not increase in time to catch up with the demands of the travellers”.

Some people have also raised safety concerns after rumours that tourists have been kidnapped and sent across the border to work in scam centres in Myanmar or Cambodia.

fatal shooting in Bangkok’s most famous shopping mall last year has also caused concern among visitors.

Reports /Trainviral/

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Royal Mail will deliver letters forever

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The prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service.

“As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC.

Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board.

Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.

Currently the Universal Service Obligation (USO) requires Royal Mail to deliver letters six days a week throughout the country for the same price. But questions have been raised over whether the service could be reduced in the future.

In an exclusive interview with the BBC, Mr Kretinsky also said he would be willing to share profits with employees, if given the go-ahead to buy the group.

However, he appeared to reject the idea of employees having a stake in Royal Mail, which unions have called for in exchange for their support.

The Royal Mail board agreed a £3.6bn takeover offer from Mr Kretinsky in May for the 500-year-old organisation, which employs more than 150,000 people. Including assumed debts, the offer is worth £5bn.

But because Royal Mail is a nationally important company, the government has the power to scrutinise and potentially block the deal.

As well as keeping the new government on side, Mr Kretinsky also faces the task of convincing postal unions that the proposed deal will benefit employees.

The USO is a potential sticking point for both the government and unions.

Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK for a fixed price.

How well this has actually been working in practice is a different matter. Ten years ago, 92% of first class post arrived on time. By the end of last year it was down to 74%, according to the regulator Ofcom.

Last year the regulator fined Royal Mail £5.6m for failing to meet its delivery targets.

Royal Mail has been pushing for this obligation to be watered down. It wants to cut second class letter deliveries to every other weekday, saying this will save £300m, and lead to “fewer than 1,000” voluntary redundancies.

‘Unconditional commitment’

Mr Kretinsky has committed in writing to honouring the USO, but only for five years.

And after that, in theory, the new owners could just walk away from it.

However, Mr Kretinsky told the BBC: “As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.

“I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.”

Mr Kretinsky added that the written five-year commitment was “the longest commitment that has ever been offered in a situation like this”.

Woman's hand posting a letter into a red post box

Another potential stumbling block for the deal, however, is how the company will be structured.

Unions would like to see the company renationalised, but Dave Ward, general secretary of the Communication Workers Union (CWU), told the BBC that would be “difficult in the current political and economic environment”.

Instead, what the CWU is pushing for is “a different model of ownership” – that is, where the employees part-own the business.

To get its support for the takeover, the union wants employees to share ownership of the company, along with other concessions including board representation for workers.

It says profit sharing is “not going to be enough to deliver our support and the support of the workforce”.

If the union doesn’t get what it wants, it won’t rule out industrial action, Mr Ward said. Its members went on strike in 2022 and 2023.

Although Mr Kretinsky said he is “very open” to profit sharing, he is not in favour of shared ownership.

“I don’t think the ownership stake is the right model,” he said. “The logic is: share of profit, yes, [but an] ownership structure creates a lot of complexity.

“For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he [still] needs remunerating.”

Mr Kretinsky said he didn’t want to create “some anonymous structure” but instead “remunerate the people who are working for the company, and creating value for the company”.

The union is also concerned about job losses and changes to the terms and conditions of postal workers’ contracts.

Mr Kretinsky has guaranteed no compulsory redundancies or changes in terms and conditions but only until 2025.

“If we are more successful, and we have more parcels to be delivered, we need not less people, but we need more people,” he said. “So really, job cuts are not part of our plan at all.”

He said if the management, union and employees work together, “we will be successful”.

Another concern is the potential break-up of the business.

The profit for Royal Mail’s parent company last year was entirely generated by its German and Canadian logistics and parcels business, GLS. Royal Mail itself made a loss.

Mr Kretinsky has promised not to split off GLS or load the parent company with excessive debt, although borrowings will rise if the deal goes through.

But he has a way to go to convince the CWU.

“I can’t think of any other country in the world that would just just hand over its entire postal service to an overseas equity investor,” Mr Ward of the CWU said.

However, Mr Kretinsky said that the postal unions “do understand that we are on the same ship, and that we need this ship to be successful, and that if we are there, we don’t have any real problems to deal with, because the sky is blue, and it’s blue for everybody.”

The union cannot stop this deal but the government can block it under the National Security and Investment Act.

Business Secretary Jonathan Reynolds has said he will scrutinise the assurances and guarantees given and called on Mr Kretinsky to work constructively with the unions.

Mr Kretinsky may say that he and the unions are ultimately on the same ship but, as things stand, they are not on the same page.

Who is Daniel Kretinsky?

Daniel Kretinsky started his career as a lawyer in his hometown of Brno, before moving to Prague.

He then made serious money in Central and Eastern European energy interests.

This includes Eustream, which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.

He then diversified into other investments, including an almost 10% stake in UK supermarket chain Sainsbury’s and a 27% share in Premier League club West Ham United.

The Czech businessman is worth about £6bn, according to reports.

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