The world’s largest restaurant chain opened its first franchise store in Iceland in 1993, with then Prime Minister David Oddsson being the ‘first person on the island to consume a Big Mac.’ The island’s three McDonald’s restaurants will close at the end of the month after suffering profit losses due to the collapse of the krona.

McDonald’s in Iceland imports most of the ingredients used. The cost of these imports doubled over the past year. According to franchise holder Lyst, “We would have to raise our prices by 20 percent to get the margin needed on our products. That would have sent a Big Mac to 780 kronur” ($6.36), compared with the 650 kronur it costs today. Our competitors all use domestic meat and lettuce and so on, while we are flying in these materials, which is extremely expensive.”

Iceland has been reeling under the global recession. The country currently relies on a $2.1 billion IMF loan, after three of its biggest banks collapsed, with cumulative debt that has grown more than 10 times the size of the economy.

McDonald’s, the world biggest restaurant chain, has been branded by some people as a ‘symbol of American colonialism’ that has ‘terrorized food culture all over the world.’ The Economist 2009 BigMac index reveals that the most expensive Big Macs are sold in Switzerland and Norway, while the cheapest are sold in South Africa and China.

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Via Bloomberg