McDonald's is Dropping Heinz Because It Hired Burger King's Former CEO

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By Lisa Baertlein

World's biggest fast-food chain seeks new ketchup for its famous french fries.

McDonald's Corp (MCD) on Friday said it plans to end its 40-year relationship with ketchup maker H.J. Heinz Co, since that company is now led by Bernardo Hees, the former chief executive of hamburger rival Burger King Worldwide Inc.

"As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time," McDonald's said in a statement.

"We have spoken to Heinz and plan to work together to ensure a smooth and orderly transition," said McDonald's, which has more than 34,000 restaurants around the globe.

Heinz declined to comment. "As a matter of policy, Heinz does not comment on relationships with customers," company spokesman Michael Mullen said.

The switch will be more apparent overseas than in the United States, as McDonald's only serves Heinz ketchup in two domestic markets - Pittsburgh and Minneapolis, the Pittsburgh Post-Gazette reported on Friday.
Indeed, ketchup packages handed out at McDonald's restaurants in the United States often say only "fancy ketchup." Most in-store ketchup dispensers are not branded.

The move from McDonald's could benefit Heinz ketchup rivals Hunt's, owned by ConAgra Foods Inc, and Del Monte.

Warren Buffett's Berkshire Hathaway and an investment fund affiliated with 3G Capital bought Heinz for $28 billion in June and immediately named Hees CEO.

Burger King went public in June 2012, less than two years after it was taken private by 3G Capital Management LLC, which retains a stake in the fast-food chain.

Burger King has been a Heinz customer for "decades" and uses its products in roughly 80 percent of markets around the world, spokesman Miguel Piedra told Reuters.
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