Home Business McDonald’s, Coca-Cola and Starbucks Officially Halt All Russian Business

McDonald’s, Coca-Cola and Starbucks Officially Halt All Russian Business

McDonald’s, Coca-Cola and Starbucks Officially Halt All Russian Business
Source: BBC

McDonald’s, Coca-Cola, and Starbucks have joined the list of companies that have suspended operations in Russia due to the invasion of Ukraine.

McDonald’s announced the temporary closure of its 850 outlets in Russia, while Starbucks announced the closure of its 100 coffee shops.

Heineken halted beer manufacturing and sales in Russia on Wednesday.

Mothercare also said that all activity in Russia, which accounts for 20 percent to 25 percent of the company’s global revenues, had been halted.

McDonald’s, Coca-Cola, and Starbucks have taken action in response to rising pressure on businesses to respond to the conflict in Ukraine. All three companies stated that they will continue to pay their employees.

Corporations who were following the tide of firms leaving Russia were doing so because “shareholders and wider stakeholders wouldn’t stand for ongoing creation of revenues and profits” from the nation, according to Anna MacDonald, a fund manager at Amati Global Investors.

“It was influencing their stock values, and the mood was tense.”

McDonald’s opened a restaurant in Moscow in 1990, just as the Soviet Union’s economy was opening up, and it drew tens of thousands of people for its burgers and fries. Its demise now bears a comparable symbolic weight, and it may have an impact on other businesses.

Burger King, on the other hand, has not stated that it will cease operations in Russia. It pledged $3 million (£2.3 million) to help Ukrainian migrants and stated they could obtain free Whopper meal coupons if they moved to Europe.

Burger King’s parent company, Restaurant Brands International, said that it will donate proceeds from its more than 800 franchised locations in Russia to humanitarian endeavors.

Chris Kempczinski, the CEO of McDonald’s, said it was “difficult to forecast” when the company will reopen in Russia.

McDonald’s has also temporarily closed its 108 stores in Ukraine, where it is still paying salaries and contributing $5 million to an employee aid fund.

The nations collectively account for around 9% of the company’s revenue and 2% of worldwide sales.

As Russian brutality against civilians has increased, companies have been under pressure to intervene.

In recent days, the hashtags #BoycottMcDonalds and #BoycottCocaCola had been trending on Twitter.

Hundreds of well-known companies, including Netflix and Levi’s, have already halted sales or services in Russia as a result of harsh sanctions imposed by Western allies.

Coca-Cola said on Tuesday that it will cease operations in Russia, which accounted for around 2% of the company’s operational sales and profitability. It also owns around 20% of a bottling and distribution company in Russia.

“Our sympathies are with the people in Ukraine who are suffering horrific consequences as a result of these awful events,” the business said.

Pepsi, which has a significantly greater presence in Russia than competitor Coca-Cola, said that manufacturing and sales of Pepsi and other global brands, as well as capital investments and advertising, will be halted in Russia due to “horrific events” in Ukraine.

However, the business said it will continue to provide other goods in Russia, where it began operations during the Cold War and today employs 20,000 people.

“Now, more than ever, as a food and beverage firm, we must be faithful to the humanitarian component of our business,” Ramon Laguarta stated. “This means we must continue to provide our other products in Russia, including everyday necessities like milk and other dairy products, as well as infant formula and baby food.”

Starbucks also declared that it will suspend all operations in the nation, including product shipments.

More than 100 locations operated by the coffee chain’s licensee in the nation will be temporarily closed. Starbucks said the licensee, Kuwait-based Alshaya Group, will continue to pay its roughly 2,000 employees.