McDonald's closing up in Iceland

There are currently just three McDonald's fast-food restaurants in Iceland. After next week there will be none.

The north Atlantic island nation, still struggling with the effects of a financial crash that hit it last year when its banks collapsed, will join the list of European countries without a McDonald's. The others are Albania and Bosnia and Herzegovina.

Jon Ogmundsson, managing director of Lyst, which holds the McDonald's franchise in Iceland, said the rising cost of importing ingredients and no sign of economic recovery meant the business no longer is financially viable.

He said the cost of McDonald's ingredients, which the company insists be imported, mostly from Germany, had doubled in the last 18 months as a result of severe depreciation of the Icelandic krona and high import taxes.

"I've sold more hamburgers in the last few months than ever before, but the cost is prohibitive. It just makes no sense," Ogmundsson told Reuters. "For a kilo of onion, imported from Germany, I'm paying the equivalent of a bottle of good whiskey."
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