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Tuesday, May 28, 2024

After McDonald’s, Burger King drops tomatoes from menu in India

Fast-food chains and households are limiting the use of the staple after prices more than quadrupled

Burger King has removed tomatoes from its burgers and wraps at numerous Indian branches after prices surged more than fourfold, Reuters reported on Wednesday. The move comes as India grapples with its highest food inflation rate since January 2020, significantly impacting consumers throughout the country.

The global fast-food chain, which boasts almost 400 establishments in India, has acted after McDonald’s and Subway also removed tomatoes from their menus. “Even tomatoes need a break… we regret the absence of tomatoes in our dishes,” read notices spotted at several Burger King outlets in India. The companies cited the need to adhere to “high quality standards” and promised that the absence was only temporary.

Read more: Burger king: Prince William serves up food to surprised diners

In an apparent marketing ploy, pizza chain Domino’s has lowered prices to appeal to cash-strapped consumers and is offering a $0.60 pizza, reportedly making it the cheapest offered by the company anywhere in the world.

Prices for tomatoes have surged up to 450% in India, owing to disruptions in crop production and supply chains caused by monsoon rains, although the situation has recently improved. Retail inflation data for July revealed a 37% increase in vegetable prices year-on-year. As well as tomatoes, prices for essential items in Indian cuisine such as onions, peas, garlic, and ginger have all experienced a surge. “If prices remain elevated, eateries will eventually need to implement price hikes,” noted Amnish Aggarwal, head of research at India’s Prabhudas Lilladher.

Read more: Burger King introduces meatless burger with 20 slices of cheese

To address the supply crisis, India has initiated tomato imports from Nepal and deployed vans to distribute the staple at reduced rates nationwide. Social media posts have shown extensive queues in various parts of the country.

The tomato crisis comes as a challenge for Prime Minister Narendra Modi’s government ahead of crucial elections next year. The Reserve Bank of India (RBI) on August 10 raised its inflation forecast from 5.1% to 5.4% for the financial year ending March 2024, after retail inflation jumped to 7.44% in July. In the current quarter, the RBI now sees inflation at 6.2% compared to a previous estimate of 5.2%, and out of the central bank’s target zone of 2%-6%.

Headline inflation projection for Q2 of 2023-24 has been revised up substantially, primarily due to the price shock from vegetables. Given the likely short-term nature of these shocks, monetary policy can look through high inflation prints caused by such shocks for some time,” RBI Governor Shaktikanta Das said.

According to a Bloomberg report on Tuesday, Citigroup has revised its headline consumer price outlook for the current fiscal year to 5.7% from 5.3%. Barclays has raised its estimate to 5.4% from 5%, while Goldman Sachs has projected inflation for the current year to average at 5.8%, up from a former estimate of 5.6%.

Speaking on Tuesday on the occasion of India’s 77th Independence Anniversary, Modi pledged that his administration would work on further measures to tackle inflation. The leader said the entire world is grappling with high inflation, and that when India imports goods it also “ends up importing inflation.”