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After a Warren Buffett buyout, McDonald's squeezes Heinz

Friday, 25 Oct 2013 | 3:35 PM ET
McDonald's no longer using Heinz
Monday, 28 Oct 2013 | 2:52 PM ET
McDonald's has dropped Heinz Ketchup after 40 years. CNBC's Jane Wells reports McDonald's only uses Heinz in 2 U.S. markets, and most of its ketchup comes from a variety of other suppliers.

Shorts are safe for now, but ketchup is getting squeezed at McDonald's.

After a relationship spanning more than 40 years, the fast-food giant is transitioning Heinz out of its restaurants, the company said Friday.

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The move comes after former Burger King CEO Bernardo Hees became the chief at Heinz in June. Hees, who also serves as vice chairman of Burger King's board of directors, took the helm after Heinz's sale to Warren Buffett's Berkshire Hathaway and the Brazilian investment firm 3G Capital for $23.3 billion.

"As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time," said McDonald's in a statement. "We have spoken to Heinz and plan to work together to ensure a smooth and orderly transition of the McDonald's restaurant business, and are confident that there will be no impact to our business, our customers and our great-tasting food at McDonald's."

McDonald's 'Mighty Wings' fail to lift stock
Peter Saleh, Telsey Advisory Group analyst, says despite menu innovations and a big advertising push, McDonald's is still struggling to attract customers to its doors.

The impact of this decision will likely be seen more in international markets, where Heinz had been gaining ground, the Pittsburgh Post-Gazette reported.

"It's a global transition to other suppliers," Lisa McComb, director of McDonald's U.S. media relations, told the paper. "Heinz was only used in two markets in the U.S."

Michael Mullen, Heinz's senior vice president of corporate and government affairs, said, "As a matter of policy, Heinz does not comment on relationships with customers. All our food service customers globally remain valuable to the company and are an important part of what has made the H.J. Heinz Co. what it is today. We continue to operate respecting every customer while upholding the high level of confidentiality and business ethics that [we have] built with our business partners over the years."

—By CNBC's Katie Little. Follow her on Twitter @KatieLittle

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