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Burger King, one of India’s major burger chains, has responded to soaring tomato prices by removing tomatoes from its packaging and burgers at numerous Indian outlets, citing quality issues. This move reflects the wider challenge of surging food inflation impacting consumers in the world’s most populous country.
Tomato Shortage and Menu Changes:
- Burger King has encountered a tomato shortage due to tomato prices increasing over fourfold. Some outlets have removed tomatoes from their offerings, with the explanation, “Even tomatoes need a holiday… we can’t add tomatoes to our food.”
- Other fast-food chains like McDonald’s and Subway have also excluded tomatoes from their menus due to India’s record-high food inflation since January 2020.
- Domino’s has tried to counter the impact by reducing prices, offering a $0.60 pizza – the world’s cheapest.
Challenges and Responses:
- The tomato scarcity aligns with disrupted crops and supply chains caused by monsoon rains, leading to a spike of up to 450% in tomato prices. However, prices have somewhat subsided since.
- Burger King’s Indian franchisee emphasizes adherence to high quality standards and assures customers that tomatoes will return soon.
- Restaurant Brands Asia (operating Burger King in India) has not commented on the situation.
- Retail inflation data for July reveals a 37% year-on-year increase in vegetable prices, impacting staple foods like onions, peas, garlic, and ginger.
- Analysts suggest that if high prices persist, restaurants may be forced to raise prices to maintain profitability.
Wider Implications:
- The tomato price surge strains profit margins for foreign fast-food chains operating in India’s nearly $5 billion market.
- Prime Minister Narendra Modi’s government faces a test as it navigates this challenge in a crucial year leading up to national elections.
- To counter the supply crisis, India has imported tomatoes from Nepal and implemented measures to distribute goods at lower prices nationwide.
