Iconic US Brands Join Exodus of Western Companies from Russia Over Invasion of Ukraine   

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On March 9, 2022, Posted by , in Новини, Світ, With No Comments

Four iconic U.S. food and beverage companies have joined the growing list of Western companies who have either shut down operations in Russia or are exiting altogether over that country’s invasion of neighboring Ukraine.

Fast food giant McDonald’s, which opened its first Russian location in Moscow’s Pushkin Square in 1990, said Tuesday that it was closing all 850 restaurants across Russia while continuing to pay its 62,000 employees.

The decision will cost McDonald’s millions of dollars of revenue, as it directly owns 84% of the restaurants in Russia, as opposed to its normal business model of licensing them to independent franchise operators. But president and chief executive officer Chris Kempczinski said in a letter to McDonald’s employees that “we cannot ignore the needless suffering unfolding in Ukraine.”

Seattle-based Starbucks then made a similar move, announcing it was temporarily shutting down 130 coffeehouses across Russia that are owned and operated by Kuwaiti-based franchisee Alshaya Group. Starbucks CEO Kevin Johnson said in an open letter that the company will halt all shipments of company products to Russia, but said Alshaya will continue to pay its 2,000 local employees.

Also shutting down or curtailing their operations in Russia are iconic U.S. soft drink rivals Coca-Cola and Pepsi. Coca-Cola gave few details about the suspension of its operations, while Pepsi — which has been operating in Russia since the early 1960s at the height of the Cold War — said it was halting all sales of its sodas, including its flagship brand, but would continue to manufacture milk, baby formula and baby food in order to keep tens of thousands of Russian workers employed.

McDonald’s, Coca-Cola and Pepsi have been under increasing pressure to close or curtail their operations in Russia since the start of the Ukraine invasion on February 24. The companies have been the target of a boycott campaign on social media, while New York state Comptroller Thomas DiNapoli, whose office oversees the state’s employee pension fund, sent each company a letter urging them to stop doing business in Russia. The fund invests in all three companies.

Meanwhile, U.S.-based Yum Brands, the parent company of KFC, a chain of fried chicken restaurants, and Pizza Hut, said Tuesday that it will close 70 company-owned KFC restaurants in Russia and was in talks with a franchisee to close all Pizza Hut restaurants.

And Dutch brewer Heineken announced Wednesday it will also suspend operations in Russia, including the sale, production and advertising of its iconic beer, and would “step up support and donations for NGOs (non-government organizations) operating in Poland, Hungary, Romania and Slovakia” assisting Ukrainian refugees.

Heineken had already announced plans to end all new investment and exports to Russia.

Numerous Western companies across a wide variety of sectors have announced plans to suspend or curtail their operations in Russia over the invasion, including British-based oil giants BP and Shell;, Japanese automakers Toyota, Nissan and Honda; aviation giants Boeing and Airbus; financial services companies American Express, Visa and Mastercard; and tech and entertainment giants Netflix, Apple, Google and TikTok.

In addition, U.S.-based internet provider Lumen Technologies announced Tuesday it was disconnecting its network service in Russia “due to increased security risk inside Russia.”

Some information for this report came from The Associated Press and Reuters.

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