A Russian consumer rights' group recently filed a lawsuit against McDonald's at Moscow's Tverskoy Court. The consumer groups involved in the suit say that McDonald's milkshakes are falsely named because they contain little milk.
McDonald's shakes don't deserve to be called milkshakes
Analysis of milkshakes sold at McDonald's outlets in Russia revealed the beverages contained more vegetable oil than dairy product. Experts at the Institute of Laboratory of Nutrition, say that by Russian law these drinks can be called "milk-containing" but cannot be labeled as "milk". Consumer rights advocate Mikhail Anshakov, says that the "McMilkshake" is falsely named, "They do not list the ingredients of their products which is a strict requirement for organizations of the type they are registered as in Russia. Moreover, their products contain excessive amounts of several ingredients, which is why the product name is insufficient."
Representatives of the Consumer Rights Protection Society (CRPS) charge that by "concealing the content" of its products McDonald's misleads consumers. "You might be able to get away with this type of fraud in America, but not Russia" said Yogi Protovokov of Moscow. The plaintiffs in the lawsuit do not seek any money from McDonald's, but want the company to redesign the packaging of their products to reveal the ingredients in its menu items, rather than simply listing the calories, protein, fat and carbohydrates. Altering product packaging would entail a multi-million dollar expense to the fast food purveyor.
Taxes and ingredient lists
The current lawsuit hinges in part on another Russian court ruling last year. McDonald's won its case against the Moscow territorial division of the Federal Tax Service. That case concluded with a judge determining that McDonald's in Russia is not a restaurant but company which sells food products as a store. The result of the suit seemed favorable to McDonalds at the time, resulting in a 10 percent rather than 18 percent Value Added Tax.
However, by Russian law, a store which sells food products which it also manufactures must provide accurate information regarding the ingredients in its food, as well as any biologically active supplements and the presence of the GMOs, as well as the date and place of the food's manufacturing. Russian law also stipulates that a food store must provide information on the product packaging about the potential effects of its food for people with conditions and certain diseases.
Consumer watchdog groups in Russia say McDonald's wants to have it both ways, gaining the tax benefits of being classified as a store, while not fulfilling the obligations such a status incurs according to Russian law. The CPRS website explained the need for the suit, saying "The McDonald's restaurant chain deliberately violates the Russian consumer rights legislation, profiting twice from the privileged situation created by Moscow's Arbitration Court decision."
McDonald's representatives claim not to have received notice of the lawsuit and it was also absent in the court's database, according to an official statement sent to The Moscow News. But personnel at the Tverskoi court confirmed to the Russian business newspaper Vedomosti that the lawsuit has been filed. Some Russian legal experts say it will be difficult for the consumer group to win its case against McDonald's, pointing out that the milkshakes in question are produced using a technology certified by the Russian branch of Europe's biggest milk product manufacturer Ehrmann.
The new lawsuit comes on the heels of a year of both expansion and litigation for McDonald's in Russia, where it has operated since 1990. In 2011, the company opened 40 new restaurants in Russia. They also faced lawsuits from customers. In one case, a man who won $50 damages plus the cost of his sandwich after getting food poisoning from consuming a Big Mac. In another suit, in which a St. Petersburg man received $3,500 to cover dental expenses for the broken tooth he got when the salad he ordered at McDonald's contained a stone.