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Fast Food

Indian state to inspect outlets of global fast-food chains after McDonald’s cheese crackdown

Indian state to inspect outlets of global fast-food chains after McDonald’s cheese crackdown
A general view of the McDonald's first ever vegetarian-only restaurant near the Golden Temple (not pictured), the holiest of Sikh shrines in Amritsar, India, 12 April 2014. EPA/RAMINDER PAL SINGH

MUMBAI, Feb 27 (Reuters) - India's western state of Maharashtra will inspect outlets of global fast-food brands to check if they use cheese alternatives in products wrongly promoted as containing real cheese, widening scrutiny beyond a crackdown on McDonald's, a top official said.

The checks threaten to cause a headache for global brands after recent inflationary pressure hit consumption of burgers and pizzas that are pricey for many Indian consumers, prompting firms to launch of discounted offerings.

McDonald’s MCD.N biggest India franchisee, Westlife Foodworld, WEST.NS has been defending its use of “real cheese” after media reported that state authorities last year found some products made use of so-called cheese analogues of vegetable oil, rather than real cheese.

The McDonald’s franchisee disagreed with the findings, but in December it dropped the word “cheese” from the names of many burgers and nuggets it sells statewide, letters seen by Reuters show.

It renamed a “corn and cheese burger” as an “American vegetarian burger”, for example.

Inspectors of the state’s Food and Drug Administration will now visit all McDonald’s outlets, as well as those of other major brands, to check for similar violations of display and labelling rules, its chief, Abhimanyu Kale, told Reuters.

“We are planning to check all outlets of McDonald’s,” he said. “We will also take action on other well-known and frequently visited global fast-food chain outlets,” he added, but declined to identify the brands being targeted.

Shares of Westlife plunged as much as 6.7% after the Reuters report.

Another senior state government official, who sought anonymity, said inspectors would visit Indian franchisee outlets of brands such as Domino’s DPZ.N, Pizza Hut, Burger King and KFC.

Indian state authorities have the power to suspend the licences of restaurants found to have infringed food and safety regulations in a way that misleads consumers.

Westlife, which runs McDonald’s in west and south India, will welcome any inspections and maintains the “highest standards”, its managing director, Saurabh Kalra, said.

Domino’s franchisee Jubilant FoodWorks JUBI.NS, Burger King operator Restaurant Brands Asia RESR.NS and Devyani International DEVY.NS, which operates Yum Brands’ YUM.N Pizza Hut and KFC in India, did not respond to Reuters queries.

Another Pizza Hut operator, India’s Sapphire Foods SAPI.NS, declined comment.

Devyani shares slipped on Tuesday’s news to trade down 4%.

India’s western state of Maharashtra is its second most populous. Home to the financial capital Mumbai, which has about 100 McDonald’s outlets, and many other urban cities, it is a key market for global fast-food brands.

In the McDonald’s case, state food inspectors suspended the licence of one outlet east of Mumbai in November for allegedly using analogues in products promoted as containing cheese.

The suspension was later revoked on appeal by Westlife, the franchisee.

The company reassured many consumers online who voiced concerns about its cheese offerings, saying on social network X that it uses “globally approved gold-standard suppliers”.

“Our cheese is made from real milk only and we do not use any substitutes or cheese analogues,” it said on Monday.

(Editing by Aditya Kalra and Clarence Fernandez)

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