Day 067 - 15 Dec 94 - Page 57


     
     1        they are not currently exporting McDonald's products to our
     2        McDonald's suppliers or restaurants.  That applies to both
     3        chicken and beef.
     4
     5   Q.   So which countries have they exported to in the past?
     6        A.  For McDonald's?
     7
     8   Q.   Yes.
     9        A.  None.
    10
    11   Q.   Since when do you know that?
    12        A.  I know as far as I have been working with the company
    13        which is three and a half years, I have never heard any
    14        comments or discussions.  I have heard that they have never
    15        done that.  I have asked the previous management and the
    16        current management and nobody has ever said that we have
    17        exported product for McDonald's.  I have also asked our
    18        people who are based in Florida who are responsible for
    19        Latin America and who have been with the company for up to
    20        20 years, and they have confirmed hat they have never in
    21        any instance exported products from Costa Rica to
    22        McDonald's to our suppliers, to McDonald's suppliers or to
    23        McDonald's restaurants.
    24
    25   Q.   You said they were keen now to do that?
    26        A.  Excuse me, I did not hear you?
    27
    28   Q.   You said before they were keen to do it now?
    29        A.  They want to, of course.
    30
    31   Q.   But what is the point of them being keen on it if you do
    32        not accept it?
    33        A.  I did not say we do not accept it.  I said we do not do
    34        it.  If we have enough evidence, which is the case right
    35        now, that they are capable, that they do not bring product
    36        from the rainforests which we do now, if we have evidence
    37        that their product meets our specifications and standards
    38        and procedures which they do now, that certainly qualifies
    39        them to be something to be considered for export.
    40        I consider them, we have referred to them as "export
    41        capable".  There are some issues that we have to take into
    42        account before we make the final decision of whether or not
    43        we should export product from one country to another.  One
    44        of them is obviously economics.  If it does not make sense
    45        economically we will not do it.  We always look at
    46        long-term implications.  We always look at all of the
    47        possible sources of supply.
    48
    49        Around Costa Rica we have a lot of countries and suppliers
    50        that are capable of meeting the same qualifications.  They 
    51        have a very strong competitor, that is the United States, 
    52        which the competition for them is a big disadvantage in two 
    53        ways: (1) because the volumes that we have in the United
    54        States allow us to have a lower cost just because of
    55        economies of scales, and the other advantage that we have
    56        is that we have to add the cost of distribution of moving
    57        the product around.  The other part is regulations.  In the
    58        United States you can import product with very few
    59        barriers.  In Costa Rica you cannot import product from the
    60        US.  We take that into consideration when we go and talk to

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