Published: 12/12/2007

Private-equity owned Burger King, the world’s second largest restaurant chain (over 11,200 units in 65 countries), adamantly opposes an agreement which would see Florida farm workers receive one extra US cent for every pound of tomatoes purchased by the fast food giant.

Moreover, the company has pressed the Florida Tomato Growers Exchange to instruct its members to cease honoring the purchase agreements with rival chains Yum Brands and McDonald’s.

In March 2005, after a four year campaign by the Coalition of Immokalee Workers (CIW), a farmworkers organization which has been supported by the IUF and US unions, Yum Brands (owners of Taco Bell) agreed to pay the extra penny per pound. The extra cent is estimated to have added 40% to the largely immigrant farmworkers’ wages (which still fall under the poverty line). Earlier this year, McDonald’s likewise agreed. Fast food restaurants are the largest purchasers of Florida tomatoes.

Burger King and the growers now contend that these agreements violate (without explaining how) federal law .The head of the FTGE comented that they are “un-American”, while Burger King announced that they “fail to provide any solutions for the real issues facing farmworkers.” The growers association has threatened any member honoring the agreement with a USD 100,000 fine. McDonald’s and Yum Brands have stated that they wish to continue honoring the agreement, but that for now they are… “on hold.” So Florida’s tomato pickers began December with a 40% wage cut.

Three private equity funds – Bain Capital, Goldman Sachs Capital Partners and Texas Pacific Group scooped up Burger King for USD 1.5 billion in a heavily leveraged deal into which they put only USD 325 million of equity. In addition to collecting multi-million dollar annual management fees, they cashed in (USD 30 million) on cancelling their management contract when a quarter of the company’s shares were taken public through an IPO last year which netted USD 425 million. Prior to the IPO, Burger King borrowed USD 350 million (underwritten by J.P. Morgan and Citigroup) to fund a USD 367 million dividend which pushed their debt to earnings ratio past 6 to 1. Goldman Sachs, Bain and Texas Pacific Group still control 75% of Burger King shares.

Annual bonuses in 2006 for the top 12 Goldman Sachs executives were double the annual wage bill for the 10,000 Florida tomato pickers.

On November 30, over 1,500 farmworkers and supporters marched through Miami to Burger King’s corporate headquarters to protest the company’s role in sinking the agreement with the fast food chains. Workers who couldn’t come to Miami sent their shoes, which were collected under a sign reading “Doubt our poverty. Walk in our shoes.”