McDonalds has announced it will close the three McDonalds restaurants it has in Reykjavik, Iceland because the collapse of the Icelandic krona has made imports too expensive. It will close at the end of October, the compnay announced 26 October. Margins have been falling and prices rising since Iceland’s economy imploded with the world financial crisis. The krona lost 80 percent of its value against the Euro in 18 months.

McDonalds’ stipulated that all inputs, including the packaging, must come from Germany. A Big Mac sells for the equivalent of $5.29, close to the top price in Europe. Only in Switzerland and Norway are the company’s hamburgers more expensive, according to the Economist’s yearly Big Mac index. Adding another 25 percent to the price would have made them completely uncompetitive, said Magnus Ogmundsson, the managing director of McDonald’s franchise holder in Iceland.He hopes to continue selling hamburgers under a different name, with local sources of ingredients and the same workforce.

McDonalds announced in July that it was moving its European headquarters from London to Geneva by the end of the year. AP,Economist,  NZZ (Ger)

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