McDonald’s, Starbucks, Coca-Cola and PepsiCo are the latest multinational companies to announce they’re pausing business operations in Russia to protest the country’s invasion of Ukraine.
Over the past several days, the U.S.-based brands have faced mounting pressure on social media to cut ties with Russia due to their large footprint in the country.
On Tuesday, McDonald’s announced in a statement that it will temporarily close its more than 800 restaurants and pause all operations in Russia. The fast food chain said it will continue to pay salaries of the 62,000 Russian employees who will be affected by the closure.
“The conflict in Ukraine and the humanitarian crisis in Europe has caused unspeakable suffering to innocent people,” said CEO Chris Kempczinski. “We join the world in condemning aggression and violence and praying for peace.”
Starbucks initially denounced Russia’s attack of Ukraine, but made no move to shutter its 130 stores in the country that are owned and operated by a licensed partner.
However, on Tuesday, a few hours after McDonalds’ announcement, Starbucks CEO Kevin Johnson stated online that the coffee chain will suspend all business operations in Russia.
Coca-Cola and PepsiCo were initially silent about their plans, but both made surprise statements late Tuesday afternoon. Coca-Cola announced it would suspend all operations in Russia, while PepsiCo said it would stop making a number of products.
“Given the horrific events occurring in Ukraine we are announcing the suspension of the sale of Pepsi-Cola, and our global beverage brands in Russia,” said PepsiCo CEO Ramon Laguarta in a statement.
He said the company will continue manufacturing other products, including essentials such as milk, baby formula and baby food.
PepsiCo, Starbucks, McDonald’s and Coca-Cola join more than 200 companies that have curtailed their Russian operations, according to a report by Jeffrey Sonnenfeld, a management professor at Yale University.
Those companies include Ikea, Apple, H&M, Canada Goose, Visa and Mastercard.
Canadian companies, convenience store chain Couche-Tard, and e-commerce platform Shopify also announced this week that they’re suspending business dealings in Russia.
Companies still in Russia
Sonnenfeld has identified more than 20 companies that still have “significant exposure” in Russia. A number of those businesses, such as Burger King and KFC, have now become targets on social media where they face calls for boycotts.
McDonald’s, Starbucks, Coca-Cola and PepsiCo were also a target, but the backlash they have faced should now come to an end as they halt operations in the country.
Sherry Zak of Halifax said she has reached out to several targeted companies on social media and sometimes by personal email to demand they pull out of Russia.
Zak, who is of Ukrainian descent, said she felt she had to take action to protest Russia’s war on Ukraine.
“My husband and I were watching the news with tears in our eyes,” she said. “It’s just heartbreaking. We’re just trying to make a change, make some change, make it stop.”
Companies respond
When asked about their positions in Russia, both Burger King and KFC told CBC News they don’t directly own their Russian locations and have donated money to help support humanitarian relief efforts for Ukraine.
Burger King’s owner, Toronto-based Restaurant Brands International (RBI), said it has 800 Burger Kings in Russia, each owned and operated by local franchisees.
“We support the sanctions [targeting Russia] that have been put in place by the U.S., E.U., Canada and other countries and will insist that our franchisees in Russia abide by those as well,” said RBI spokesperson, Leslie Walsh, in an email.
U.S.-based Yum! Brands, which owns KFC said that almost all its approximately 1,000 KFC restaurants in Russia are operated by independent owners under license or franchise agreements.
The company said it has suspended all investment and restaurant development in Russia and will redirect all profits from its Russian operations to relief efforts in Ukraine.
March 7, 2022 – Innovation, Science and Industry Minister François-Philippe Champagne and Alberta Finance Minister Travis Toews discuss the high cost of gasoline for consumers. Plus, former U.S. National Security Adviser John Bolton talks about whether a U.S. ban on Russian oil would thwart President Vladimir Putin’s invasion of Ukraine. 1:42:04
But business professor Ian Lee said companies keeping any ties with Russia right now will continue to be judged harshly by people around the world.
“They cannot be associated in any way, shape, or form with the Russian regime, and that’s why they’ve got to leave,” said Lee, a professor at Carleton University in Ottawa.
“Those Western companies that remain are committing — are making an enormous strategic mistake, because they will be seen increasingly in the court of public opinion to be completely insensitive.”
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