Burger King, Tim Hortons and Ethics

 

http://www.foodbeast.com/2014/08/25/burger-king-to-merge-with-tim-hortons-will-create-3rd-largest-fast-food-company-in-the-world/

 

As you have probably heard, Burger King recently bought Tim Horton’s for ~$12.5 billion and subsequently moved its corporate location to Canada.   Interested in the ramifications of the deal, I read up on the merger and stumbled across this article, in which the US Treasury department decried the move, arguing that BK was merely abusing a loophole in order to pay lower taxes.

This, of course, led to the pondering of some questions of the situation.  Is BK unethical by moving countries?  Is it less ethical if they moved countries solely to pay less?  Why is this considered unethical?

Examining this through the lenses of the two sources we had to examine for class three, and through a reading of this article, I decided the move was not unethical.  BK has the right to make profit, the responsibility to make its shareholders money, and the ability to support the communities around it.  Furthermore, they only pay ~1% less in taxes, or ~$3.4 million less a year.  It wouldn’t make sense for a company to pay $12.5 billion dollars to save $3.4 million, thus BK didn’t organize the deal for the tax reduction.

Overall, I believe the deal was ethical as BK has the right to maximize profits, as long as it does so in a legal manner.

Sources:

http://www.foodbeast.com/2014/08/25/burger-king-to-merge-with-tim-hortons-will-create-3rd-largest-fast-food-company-in-the-world/

http://time.com/3262821/burger-king-tim-hortons/

http://www.theglobeandmail.com/report-on-business/international-business/us-business/corporate-inversion-tax-deals-wrong-loopholes-must-close-treasurys-lew/article20466300/

https://www.youtube.com/watch?v=bIRUaLcvPe8

http://site.ebrary.com/lib/ubc/reader.action?docID=10187339&page=171

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