Tuesday, 8 March 2022

War in Ukraine: McDonald’s, Coca-Cola and Starbucks halt Russian sales

Image source, Getty Images

Consumer giants including McDonald’s, Coca-Cola and Starbucks have joined the list of firms halting business in Russia due to the invasion in Ukraine.

McDonald’s said it was temporarily closing its roughly 850 restaurants in Russia, while Starbucks also said its 100 coffee shops would shut.

McDonald’s said the move was a response to the “needless human suffering unfolding in Ukraine”.

The company said it was “impossible to predict” when it would reopen.

“The conflict in Ukraine and the humanitarian crisis in Europe has caused unspeakable suffering to innocent people,” chief executive Chris Kempczinski said in a memo to staff that was shared publicly.

“As a system, we join the world in condemning aggression and violence and praying for peace.”

McDonald’s said it would continue to pay its roughly 62,000 staff in Russia. The firm has also been experiencing supply chain issues there.

McDonald’s, Coca-Cola and other companies have been under pressure to act as Russian violence against civilians has escalated.

#BoycottMcDonalds and #BoycottCocaCola were trending on Twitter on Monday and over the weekend respectively.

Dozens of well-known firms including Netflix and Levi’s have already suspended sales or stopped providing services in Russia amid severe sanctions imposed by Western allies.

Image source, Getty Images

McDonald’s established its presence in Moscow in 1990, as the Soviet Union was opening its economy, drawing thousands for its burgers and fries.

As tensions with the West increased in 2014 over Russia’s annexation of Crimea, some of its restaurants were shut as part of an investigation into food standards, which many saw as politically motivated.

The closure now likewise carries symbolic weight, and is likely to influence other firms.

In 1990 I was in the queue when McDonald’s opened its 1st restaurant in Moscow: when iron curtains were crumbling & Russia was embracing the West. Today McDonald’s announced it is temporarily closing its 850 restaurants in Russia. Hugely symbolic.
— Steve Rosenberg (@BBCSteveR) March 8, 2022

The BBC is not responsible for the content of external sites.View original tweet on Twitter

McDonald’s owns a majority of its stores in Russia. Combined with Ukraine, the restaurants account for about 9% of the firm’s revenue and about 2% of global sales.

It has also temporarily closed its 108 restaurants in Ukraine, where it continues to pay salaries and has donated $5m to an employee assistance fund.

McDonald’s said its Ronald McDonald House Charities would remain active in Ukraine and Russia.

Mr Kempczinski said the firm had made the decision over the last week. In addition to staff, the move will affect hundreds of suppliers and the millions of customers McDonald’s serves in Russia each day.

The fast food chain joins a growing list of western brands to cut ties with Russia over its attack on Ukraine.

Coca-Cola on Tuesday said it was suspending operations in Russia, which accounted for roughly 2% of the firm’s operating revenue and income. It also has a roughly 20% ownership stake in a bottling and distribution business in Russia.

Starbucks also announced it would stop all business activity in the country, including shipments of Starbucks products.

The coffee chain’s licensee in the country will temporarily shut more than 100 stores it operates there. The licensee, Kuwait-based Alshaya Group, will continue pay its roughly 2,000 employees, Starbucks said.

Growing backlash

Other major global brands joining the backlash on Tuesday included the world’s largest music company, Universal Music Group, which said it was suspending all operations in Russia and closing its offices there.

“We urge an end to the violence in Ukraine as soon as possible,” the firm said in a statement sent to the BBC.

Unilever, maker of Marmite, Dove beauty products and PG Tips among other brands, also said it had suspended trade with Russia and planned to halt its advertising and media spending and investments there.

It said it would continue to supply “everyday essential food and hygiene products” that are made in Russia.

L’Oreal, the world’s biggest cosmetics company, is also shutting its stores and concessions in Russia and suspending online sales.

Pepsi, which has a much larger presence in Russia than rival Coca-Cola, said it was halting the production and sale of Pepsi and other global brands in Russia and suspending capital investments and advertising, citing “horrific events” in Ukraine.

But the company, which started operating in Russia during the Cold War and now employs 20,000 people there, said it would continue to offer other products.

“As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business,” boss Ramon Laguarta said. “That means we have a responsibility to continue to offer our other products in Russia, including daily essentials such as milk and other dairy offerings, baby formula and baby food.”

The post War in Ukraine: McDonald’s, Coca-Cola and Starbucks halt Russian sales first appeared on World News Guru.


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