DD Support Board and Research Team

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McDonald’s, Starbucks, Coca-Cola and Pepsi suspend Russian operations

https://www.theguardian.com/world/2022/mar/08/mcdonalds-bows-to-pressure-and-closes-all-its-russian-restaurants

McDonald’s is temporarily closing its 850 restaurants in Russia and pausing all operations in the country, a decision that will affect 62,000 jobs, after mounting calls for action after the invasion of Ukraine. It was later announced that Coca-Cola, Pepsi and Starbucks would also suspend their operations in the country.

The burger chain said it would continue to pay the salaries for all employees in Russia and its charitable arm, Ronald McDonald House Charities, would also continue in the country.

In a message to staff and franchisees, Chris Kempczinski, the chief executive of McDonald’s, said the situation was “extraordinarily challenging for a global brand like ours”, which he said worked with hundreds of local suppliers and partners producing its food. “We understand the impact this will have on our Russian colleagues and partners,” he said.

But he added: “Our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”

McDonald’s and other western food and drink companies have faced calls to pull out of Russia after the invasion of Ukraine.

On Tuesday night the coffee giant Starbucks became the latest company to say it was suspending all business activity in Russia. It said it would stop shipping its products and its cafes, run by a licensee, would close temporarily.

The company said that Kuwait-based Alshaya Group, which operates at least 100 Starbucks cafes, would still support its nearly 2,000 staff in Russia “who depend on Starbucks for their livelihood”.

Coca-Cola Co later said it was suspending its business in Russia. Pepsi also followed suit, saying the sale of its brands, capital investments and all advertising would be suspended in Russia and it would support “our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain”. It said it would continue to sell daily essentials, such as milk and other dairy offerings, baby formula and baby food, in Russia.

Ukraine’s foreign minister, Dmytro Kuleba, told CNN two days ago that “all western companies must withdraw from Russia” on humanitarian grounds. “We were upset to hear companies like Coca-Cola and McDonald’s remain in Russia and continue providing their products,” he said.

McDonald’s, which has operated in Russia for more than 30 years, said it could not predict when it may be able to reopen its restaurants there and would “continue to assess the situation and determine if any additional measures are required”. It said it would “closely monitor the humanitarian situation” as well as disruption to its supply chain.

McDonald’s is also paying full salaries to its Ukrainian employees and has donated $5m (£3.8m) to an assistance fund for employees as well as supporting relief efforts led by the International Red Cross.

The McDonald’s shutdown comes after a host of other consumer brands including Netflix, Levi’s, Burberry, Ikea and Unilever, the owner of Marmite and Ben & Jerry’s, announced they had halted business in the country.

Leading professional services firms including KPMG, PwC, EY and Deloitte have also cut off businesses in Russia and Belarus.

Companies around the world have been scrambling to assess their links with Russia after the US, EU and UK sought to isolate it economically with sanctions.

Sanctions have also made it illegal for US, EU or UK companies to serve some of the biggest Russian businesses, including banks such as Sberbank, Gazprombank and VTB.