Saturday, August 8, 2009

Update on McDonald's in Denmark

From frequent hat tip recipient Lars Skipper, in response to a reader question:
Most of the 85 McD's in Denmark have been designed by my father (they do need architects when building them!). When he first started building them, there were talks about putting the soda machines in the public space but it was decided against this because of a tax on (any!) fizzy drinks (both diet products and regular carbonated water are subject to the tax as well) of $0.20 per liter. This tax is on top of a sugar tax of $5 per kilogram of (any type of) sugar in your product (and of course you pay a 25 % VAT of all the taxes also). And from January 1st 2010 the sugar tax also applies to sugar-free products such as candy, ice cream, and sodas!?! Anyway, the bottom line is that sodas are pretty expensive in Denmark: Your regular 8 fl oz Diet Coke costs between $2 and $4 dollars depending on where you buy it (discount markets the former and vending machines the latter).
BUT: At the moment 33 out of the 85 McDonalds Restaurants in Denmark have decided that the cost of having people waiting in line to be served at your restaurant is too high compared to the soda tax so they have decided to having their restaurants refit and have the soda-dispensers located inside the restaurant (there is an audit-controlled teller installed in the dispensers so the restaurant will have to pay tax on the amount of soda they dispense and not the number of cups they sell - no escape from the tax authority).
The amazing thing is that Denmark has any (above ground) economic activity at all.