McDonald’s, Starbucks, Coca-Cola, Pepsi suspend operations in Russia

McDonald’s, Starbucks, Coca-Cola, PepsiCo, and GE — all omnipresent worldwide brands and emblems of US corporate might — have all indicated that their operations in Russia will be temporarily halted in response to Russia’s invasion of Ukraine.

In an open letter to staff, McDonald’s President and CEO Chris Kempczinski wrote, “Our values imply we cannot ignore the terrible human misery unfolding in Ukraine.”

The Chicago-based burger chain said it will close 850 outlets temporarily but will continue to pay its 62,000 Russian employees “who have poured their heart and soul into our McDonald’s brand.” It’s impossible to say when the company will be able to reopen its locations, according to Kempczinski.

In the letter, Kempczinski added, “The situation is incredibly hard for a worldwide brand like ours, and there are numerous concerns.” McDonald’s, for example, collaborates with hundreds of Russian suppliers and serves millions of customers every day.

Starbucks announced last Friday that proceeds from its 130 Russian outlets, which are owned and run by Kuwait-based franchisee Alshaya Group, would be donated to humanitarian assistance efforts in Ukraine. However, on Tuesday, the firm announced that those outlets will be temporarily closed.

Starbucks’ 2,000 Russian employees will continue to be paid by Alshaya Group, according to Starbucks President and CEO Kevin Johnson in an open letter to staff.

“We will continue to make decisions that are loyal to our vision and values and communicate with transparency throughout this dynamic scenario,” Johnson stated.

Coca-Cola Co. declared that its operations in Russia will be suspended, but provided little information. Coca-Cola Hellenic Bottling Co., based in Switzerland, controls ten bottling operations in Russia, which is its largest market. Coca-Cola Hellenic Bottling Co. is owned by Coke, which owns a 21% share.

Both PepsiCo and GE announced partial shutdowns of their Russian operations.

PepsiCo, based in Purchase, New York, has announced that it will halt beverage sales in Russia. Any capital investments and promotional efforts will likewise be halted.

However, the business stated that it will continue to make milk, baby formula, and baby food, in part to sustain its 20,000 Russian employees and 40,000 Russian agricultural workers in its supply chain.

In an email to staff, PepsiCo CEO Ramon Laguarta wrote, “Now more than ever, we must stay faithful to the humanitarian component of our business.”

In a tweet, GE also announced that it was partially stopping its business in Russia. Essential medical equipment and support for existing power services in Russia, according to GE.

McDonald’s is one of the companies that has suffered the most financial losses. McDonald’s owns 84 percent of its Russian outlets, unlike Starbucks and other fast food firms like as KFC and Pizza Hut, which have franchisees. McDonald’s has also temporarily closed 108 of its Ukrainian restaurants while continuing to pay its staff.

McDonald’s revealed in a recent regulatory filing that its restaurants in Russia and Ukraine account for 9% of its yearly revenue, or around USD 2 billion last year.

Yum Brands, the parent company of KFC and Pizza Hut, announced late Tuesday that 70 of its KFC outlets in Russia will be temporarily closed. The firm also stated that it was in discussions with a franchisee to close all 50 Pizza Hut locations in Russia.

It declared on Monday that all revenues from its 1,050 restaurants in Russia would be donated to humanitarian endeavours. It has also halted the construction of new restaurants around the country.

Burger King announced it will provide USD 2 million in food coupons to Ukrainian refugees and will shift income from its 800 Russian locations to relief operations.

McDonald’s announced on Tuesday that it had donated more than $5 million to its employee assistance fund as well as relief operations. It has also parked a Ronald McDonald House Charities mobile medical care unit near the Polish-Ukrainian border, and another is on its way to the Latvian border, according to the company. PepsiCo announced that it will donate food, freezers, and $400,000 to humanitarian agencies.

Some of the businesses have a lengthy history of doing business in Russia. PepsiCo entered the Russian market in the early 1960s, during the height of the Cold War, and helped the US and the Soviet Union find common ground.

Later, McDonald’s became one of the first American fast food chains to open a location in Russia, signalling the end of the Cold War. Thousands of Russians queued up before dawn on January 31, 1990, to taste hamburgers for the first time at the first McDonald’s in Moscow. By the end of the day, the company had rung up 30,000 meals on 27 cash registers, setting a new opening-day record.

However, several firms have halted operations in Russia in protest of the invasion of Ukraine last month. Unilever, a consumer goods behemoth, announced on Tuesday that it has halted all imports and exports of its products into and out of Russia and would not invest any additional cash in the country.

Amazon announced Tuesday that its cloud computing network, Amazon Web Services, will no longer accept new sign-ups in Russia and Belarus.

Companies that remained in the nation were under increasing pressure. On social media, boycott hashtags for McDonald’s, Coca-Cola, and PepsiCo immediately arose.

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