The Click Times: McDonald’s and Starbucks are closing their restaurants and cafes in Russia, and CocaCola is shutting down operations there in response to the Russian invasion of Ukraine. PepsiCo is also recalling some products from the country: “McDonald’s has decided to temporarily close all of its restaurants in Russia and halt all activity in the market,” CEO Chris Kempczinski said in a statement Tuesday.
According to an investor filing, there were 847 McDonald’s outlets in Russia at the end of last year.
Worldwide, most McDonald’s (MCD) locations are franchised. However, this is not the case in Russia, where 84% of the sites are operated by the company, according to the document. According to the document, the Russian restaurants, along with 108 others in Ukraine, all operated by McDonald’s, accounted for 9% of the company’s sales in 2021.
“In Russia, we employ 62,000 people who have put their hearts and souls into our McDonald’s brand to serve their communities. We work with hundreds of local Russian suppliers and partners who produce the foods for our menu and support our brand,” said Kempczinski. “And we serve the millions of Russian customers who count on McDonald’s every day. In the more than thirty years that McDonald’s has operated in Russia, we have become an integral part of the 850 communities in which we operate.
But, he added: “At the same time, our values mean that we cannot ignore the unnecessary human suffering unfolding in Ukraine.
Starbucks:
In a message to employees Tuesday, Starbucks CEO Kevin Johnson said that “today we decided to suspend all business activities in Russia.”
He added that “our Authorized Partner has agreed to immediately go out of business and support the nearly 2,000 [employees] in Russia who depend on Starbucks for their livelihoods.
Johnson added that Starbucks will stop shipping all Starbucks products to Russia.” We condemn Russia’s horrific attacks on Ukraine and send our hearts out to all those affected,” he said.
Coke:
Coca-Cola also said on Tuesday that it was “ceasing its business in Russia.” The company said that “our heart goes out to the people who are enduring the unimaginable impact of these tragic events in Ukraine,” adding that it will monitor the situation as things change.
Also read: What does Putin want in Ukraine
PepsiCo, Danone and Unilever:
On Tuesday, PepsiCo CEO Ramón Laguarta outlined how PepsiCo is handling the situation.
“In light of the horrific events in Ukraine, we announce the suspension of sales of Pepsi-Cola, and our global beverage brands in Russia, including 7Up and Mirinda.” Laguarta added that Pepsi will suspend capital investments, advertising and promotional activities in Russia.
But PepsiCo will continue to sell some of its products, including baby formula, infant formula, milk, and other dairy options.
“We have a responsibility to continue to offer our other products to Russia, including everyday staples,” Laguarta said. “By continuing our operations, we will continue to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian farm workers in our supply chain as they face significant challenges and uncertainties ahead. “, he added.
Farryl Bertmann, a registered dietitian and associate professor in the School of Food and Nutrition Sciences at the University of Vermont, warned that citizens could suffer if major food companies leave Russia entirely, even if they have other food sources.
“I feel very strongly that people should be given the opportunity to buy a variety of foods at different prices,” he said. “This can only be done successfully if there is access.”
She said that “ultimately, foods need to be made available,” adding, “I would be very concerned if the food environment [were] to dramatically change.”
Other companies have taken a similar approach to Pepsi.Other companies have taken a similar approach to Pepsi.
Danone (DANOY), which makes silk milk alternatives, Activia, Oikos yogurt, baby formula and more, said in a LinkedIn post on Sunday that “we have decided to suspend all investment projects in Russia,” adding that it is “our production would be maintained and distribution of fresh dairy products and baby food to meet the basic nutritional needs of the local population.
Unilever (UL) issued a similar statement this week, saying, “We will continue to supply our Russian-made staple foods and hygiene products to the people of the country,” adding, “We will closely monitor it’s importation of its products.”
The company noted it is has suspended imports of its products to Russia and stops all investments in the country and exports from there. He said he will not benefit from his presence in Russia.
Faced with pressure:
The announcements followed pressure from critics, who called on the companies to leave Russia. Several Western companies from various industries have ceased operations in Russia after the country’s attack on Ukraine, but some restaurants continue to sell their products in the country.
For some restaurant chains, this may be because the locations are franchised, giving business owners less control. Yum Brands (YUM), which owns KFC, Pizza Hut, Taco Bell and Habit Grill, said in a statement that it has “suspended all investment and restaurant development in Russia.
The company added that it will “redirect all profits from operations to Russia for humanitarian efforts,” in addition to donating to the Red Cross through the Yum Brands Foundation.
The company also said it will “continue operations of company-owned KFC”- Cease restaurants in Russia and enter into an agreement to cease all Pizza Hut restaurant operations in Russia, in cooperation with its master franchisee.
“This action builds on our decision to suspend all restaurant investment and development in Russia and to redirect all profits from operations in Russia to humanitarian efforts,” the company said in a press release.
Yum has about 1,000 KFC restaurants and 50 Pizza Hut locations in Russia. The company said most of these are operated by independent owners. Boycott hashtags have been used on Twitter to attack companies like McDonald’s and PepsiCo, which have so far remained silent about their plans for Russia. McDonald’s, PepsiCo and other companies were brought in by New York State Comptroller Thomas DiNapoli.
Before McDonald’s made its announcement, DiNapoli emailed several companies represented in New York State’s Common Retirement Fund, including PepsiCo and McDonald’s, urging them to cease doing business with Russia.
“Companies like McDonald’s and PepsiCo, which has a large presence in Russia, you should consider whether doing business in Russia at this exceptionally late time is worth the risk,” DiNaPoli said in a statement.
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