Tags: burger king | boycott | tim hortons | merger

Burger King Boycott Demanded by Critics in Wake of Tim Hortons Merger

Image: Burger King Boycott Demanded by Critics in Wake of Tim Hortons Merger
(Karl-Josef Hildenbrand/DPA /Landov, file)

By    |   Wednesday, 27 Aug 2014 07:17 AM

Burger King critics have called for a boycott on the heels of its acquisition of Canadian breakfast chain Tim Hortons — a merger including a so-called "tax inversion" that moves the conglomerate's headquarters to Canada, where taxes are lower.

According to Yahoo Finance, liberal activist group MoveOn.org started a petition urging BK to drop the "Whopper Tax Dodge" or face a boycott, and MSNBC host Joe Scarborough said as much, adding that Burger King's fries "suck."

U.S. Sen. Sherrod Brown, D-Ohio, also released a statement asking citizens to avoid the fast-food giant.

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"Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders. Burger King has always said 'Have it Your Way'; well my way is to support two Ohio companies that haven’t abandoned their country or customers," Brown said.

In addition to advocating for his home-state restaurants, Brown also joined a chorus of conservatives calling for a overhauling of the tax code. Currently, the U.S. has the highest corporate tax rate in the world, 35 percent, whereas Canada's stands at 15 percent.

"The U.S. corporate tax rate should be lowered to be competitive with the average of countries that are part of the Organization for Economic Co-operation and Development, an international economic organization of more than 30 countries whose mission is to stimulate economic progress and world trade," he said.

In a move to preempt further criticism, Alex Behring, Burger King's chairman, said on Tuesday that the merger "is not a tax-driven deal." He reminded critics that Tim Hortons offers Burger King a competitive advantage in the so-called breakfast wars with McDonalds, Taco Bell, and Dunkin Donuts. By combining the companies, Hortons also benefits from increased economies of scale, and both now comprise the third-largest fast-food chain in the world.

"It is fundamentally about growth and creating value through accelerated expansion," Behring stated.

In addition to calls for a boycott, The Wall Street Journal reported that the deal's underwriter, Warren Buffett, has also been called a hypocrite for helping Burger King lower its tax bill while in the past having called for higher taxes on the rich.

"The gap between what he says about taxes for everyone else and what he does for himself and Berkshire has always loomed large," Jeff Matthews, general partner at hedge fund Ram Partners LP — who has written books about Buffett's Berkshire firm — told the Journal.

The Journal also noted that Burger King's stock price jumped 20 percent on Monday in reaction to the merger news.



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Burger King critics have called for a boycott on the heels of its acquisition of Canadian breakfast chain Tim Hortons — a merger including a so-called "tax inversion" that moves the conglomerate's headquarters to Canada, where taxes are lower.
burger king, boycott, tim hortons, merger
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2014-17-27
Wednesday, 27 Aug 2014 07:17 AM
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