McDonald's squeezes out Heinz over new CEO pick

PITTSBURGH, PA - AUGUST 23: The historic neon Heinz factory sign is seen at night August 23, 2004 in Pittsburgh, Pennsylvania. H.J. Heinz Co reported its first-quarter earnings fell 9 percent compared to last year with with strong sales in North America. (Photo by Chris Hondros/Getty Images) Chris Hondros

(CBS News) McDonald's is making a big switch at some of its restaurants. After 40 years, it's parting ways with Heinz ketchup. The reason goes back to a long-standing rivalry.

On Friday, McDonald's, the world's largest restaurant chain, announced diners would no longer be squeezing Heinz ketchup in any of its 34,000 stores. The decision was made after Heinz appointed the former head of Burger King, Bernardo Hees, as its new chief executive officer. In three years, Hees oversaw major changes at the struggling burger chain, remaking Burger King into a viable competitor to the mighty Big Mac.

In a statement, the Illinois-based company said, "As a result of recent management changes at Heinz, we have decided to transition our business to other suppliers over time."

Richard Levick, chief executive officer of Levick Public Relations, said, "It appears to be that Hees has been brought in, he was the former CEO of Burger King, and so they feel that it's inappropriate that their 40-year relationship with Heinz continue. There are a lot of other places that they can get ketchup."

In the U.S., McDonald's only offers Heinz in two markets -- Minneapolis, and Pittsburgh -- the condiment giant's home. The rest of the country is served an in-house brand called "fancy ketchup." But globally, where Heinz is more widely available, it's a different story. Levick said, "For Heinz, the problem is going to be, they've got most of their market in the emerging world, how does this impact them internationally."

Like getting ketchup from a bottle, the relationship between McDonald's and Heinz has slowly spilled out. In the early '70s, Heinz supplied most of the chain's ketchup. But, when a thin tomato crop meant it was unable to keep up with demand, McDonald's went elsewhere. Now, as McDonald's continues to expand to the far reaches of the globe, Heinz will no longer be along for the ride.

Watch Dean Reynolds' full report above.

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