Burger King/Tim Hortons

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Can't help thinking "So what?" about this buyout (or whatever it is being called). I can't even remember the last time I bought a burger - or fries - NEVER poutine - pizza maybe twice a year - don't buy DQ's imitation ice cream lookalikes either. .
 
My gut feeling is that there won't be much change, certainly no more than we saw when Wendy's and Timmies were together. You might get some BK-Timmies joint operations like you saw with Wendy's-Timmies' or BK using Timmies products to create their competition to Mickey D's McCafe, but I think Timmies will likely stay the course in Canada. Eventually, it might let them extend their penetration south of the border but that would most likely be, as I suggested, through a BK "McCafe"-like shared store rather than actual Timmies springing up all over the US the way that they have here.
 
Mendalla said:
My gut feeling is that there won't be much change, certainly no more than we saw when Wendy's and Timmies were together. You might get some BK-Timmies joint operations like you saw with Wendy's-Timmies' or BK using Timmies products to create their competition to Mickey D's McCafe, but I think Timmies will likely stay the course in Canada. Eventually, it might let them extend their penetration south of the border but that would most likely be, as I suggested, through a BK "McCafe"-like shared store rather than actual Timmies springing up all over the US the way that they have here.
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The plan - as you suggest Mendalla - is to keep operations basically the same - then phase Tim Hortons drinks into Burger King locations - principally to compete with McDonalds. We're still Canada's most popular coffee. We still sell much more than McDonald's. Now we want to blow them right out of the water.
 
The plan, as I heard it (and keep in mind, I was hearing about it on the BBC while I was over in Europe), was to have a holding company incorporated in Canada (to benefit from our low corporate tax rates) that would then own both BK and Timmies. I assume employees would still be employed by their current company, just as I am employed by the specific company in our group that I work for, not the parent company.
 
That is what i have read as well.

Thoughts:
1. Will Canadians see Tim Hortons as American owned and TH lose their Canadian product heart string connection over the next generation

2. Will the conglomerate throw money at US franchise incentives to anyone who pairs BK with TH. Easy expansion and market infiltration if they do
 
Mendalla said:
The plan, as I heard it (and keep in mind, I was hearing about it on the BBC while I was over in Europe), was to have a holding company incorporated in Canada (to benefit from our low corporate tax rates) that would then own both BK and Timmies. I assume employees would still be employed by their current company, just as I am employed by the specific company in our group that I work for, not the parent company.
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Actually - I think you're right on that one. I stand corrected,
 
Pr. Jae said:
We'll be employees of Tim Hortons - a division of - ooh - what's it called again - 3G - 3M - something like that.
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3G Capital (who took over Burger King) is a Brazilian investors group - the same company that took over H.J. Heinz and decimated Leamington, Ontario by moving the ketchup jobs to Mexico. My guess is that there will be job cuts at Tim Hortons. Last Saturdays Toronto Star reported that both Burger King and Tim Horton's paid 27 % in taxes, last year. One of the leaders at 3G Capital, Jorge Paulo Lemann, is worth an estimated $24 BILLION, The Star reports. I actually wish Harper could step in and block this deal.
 
Jobs are being moved to lowercost areas with better tax incentives for as long as humans have had free will. The range in which those jobs have moved has shifted. Governments play games with each other.
I remember bac in the 70's, I think, when assembly moved to an area in Ontario from the states due to tax incentives from the small city that had lost a bunch of furniture manufacturing.
You have manufacturing moving out of a region to get away from union restrictions
Professional services have been moving off shore to India for a long time in various ways.

If you want to block it, then you start to tax those purchases of service in a different way....and you consider it from a global standpoint...coz otherwise people will do what BK did, move your head office.

Also, people who purchase product need to think...do you want the cheapest product, or do you want a product that attests to some % of your product made in Canada (not just labelling or repackaging)

You also have to conisder why you are protecting Canada over supplying middle class jobs in other countries...is it ok to consider them charities, but not for them to get a leg up .

a bit off track, but, i don't get the "harper should block it".
 
Inukshuk said:
3G Capital (who took over Burger King) is a Brazilian investors group - the same company that took over H.J. Heinz and decimated Leamington, Ontario by moving the ketchup jobs to Mexico. My guess is that there will be job cuts at Tim Hortons. Last Saturdays Toronto Star reported that both Burger King and Tim Horton's paid 27 % in taxes, last year. One of the leaders at 3G Capital, Jorge Paulo Lemann, is worth an estimated $24 BILLION, The Star reports. I actually wish Harper could step in and block this deal.
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Inukshuk is talking about this: http://www.bloomberg.com/news/2014-...-disappear-at-doughnut-chain-tim-hortons.html

However, if you read that article, there is nothing about jobs moving South. Rather it talks about how they forced Burger King, InBev (which, by the way, owns Labatt's so now Timmy's and Labatt's are effectively corporate cousins), and other subsidiaries' exec and management levels to start being efficient. Using scan-to-email in place of mail and fax, taking away management perks, and that sort of thing. BK's head office stayed in Pittsburgh (until now, since the merged company's HO is coming to Canada where tax rates are lower).

It's not really a sector like manufacturing where you can offshore jobs. A service business like a restaurant needs people on the ground. Yes, there will be consolidation at the head office level and product distribution level, but your minimum wage burger flippers and coffee pourers and their managers aren't going anywhere. You can't serve coffee in London from Mexico City. Furthermore, they are committed to having the head office here in Canada so they can take advantage of our corporate tax rates so, while there will churn at the head office, the jobs will be here.

As for government involvement, our current setup is a mess. We need a clear set of laws that define when and how government can intervene in a corporate investment/merger/takeover. Right now, Harper, like the Libs before him, is flying by the seat of his pants. And I see no reason for the government to intervene in this one. No resource ownership or national security issues are involved and there won't be a mass flight of jobs anywhere like you see with manufacturing takeovers (for reasons discussed above).
 
Personally I'm an employee of a cafeteria company that pays Tim Hortons a fee which allows us to operate several small TH booths in several of our cafeterias. I can't foresee any change for me and my coworkers in terms of employment as a result of the recent TH/BK developments.
 
@Pinga ~ The Canadian government has to assess all foreign direct investments of $350(?) million, or more, and I just don't see the benefits. Tim Horton's is profitable. Burger King is not, and is in debt. Standard & Poor has put Burger King on watch for a credit downgrade. Add to that the billions borrowed for this takeover.... Coffee by coffee, the Canadian consumer will be paying down that debt. That debt repayment will also cut the taxes that 3G will have to pay in Canada. IMO, 3G Capital has earned their 'vulture' nickname.
The Canadian market is already saturated with Tim Horton's. That success has been built on the Canadian nostalgia marketing campaign, by Tim Horton's, of hockey arenas, send a kid to camp etc. That won't transfer globally. Do we really want to spread bacon sundaes, whoppers and drive through coffee around the globe?
What benefits do you see in this takeover?
 
Inukshuk said:
@Pinga
The Canadian market is already saturated with Tim Horton's. That success has been built on the Canadian nostalgia marketing campaign, by Tim Horton's, of hockey arenas, send a kid to camp etc. That won't transfer globally. Do we really want to spread bacon sundaes, whoppers and drive through coffee around the globe?
What benefits do you see in this takeover?
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What Tim Hortons has learned to do well is to capitalize on nostalgia - tradition - and care for kids. Those values do transfer globally - they just need to be repackaged. People around the world care about such things - they just express said concern in different ways. The benefits of the takeover for Burger King is that they get a hold of a better quality of coffee to spread around in competition with McDonald's café drinks.
 
I thought Wendys tried to expand Timmies south of the border and it didn't go over very well?
 
Inukshuk said:
@Pinga ~ The Canadian government has to assess all foreign direct investments of $350(?) million, or more, and I just don't see the benefits. Tim Horton's is profitable. Burger King is not, and is in debt. Standard & Poor has put Burger King on watch for a credit downgrade. Add to that the billions borrowed for this takeover.... Coffee by coffee, the Canadian consumer will be paying down that debt. That debt repayment will also cut the taxes that 3G will have to pay in Canada. IMO, 3G Capital has earned their 'vulture' nickname.
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Except that's not what a government review looks at. That's what shareholders look at. The government looks purely at things like impact on jobs, whether the merger places key technology or security assets at risk, whether ownership of natural resources is affected, and that sort of thing. Whether the merged company is economically viable is a problem for shareholders, not governments.


Coffee by coffee, the Canadian consumer will be paying down that debt.
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And if Canadian consumers don't like the merger or paying down BK's debt, they can stop going to Timmy's. That is not a reason to stop the merger.
 
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