The exodus of international companies from the Russian market in the wake of Vladimir Putin’s universally condemned invasion of Ukraine accelerated today as four major U.S. food corporations announced that they were suspending operations in the country.
Russian fast food junkies are going to have to find a new place to get their empty calories as McDonald’s announced that they would be suspending operations — at least temporarily — at its 850 stores in Russia, 84% of which are directly owned by the company. The hamburger giant also announced that it would continue to pay its ts 62,000 employees in the country “who have poured their heart and soul into our McDonald’s brand.”
Exactly how they plan to do that with the Russian banking system mostly cut off from international payment processing systems due to the horrified response to the war from Western nations is still unclear.
In an open letter to McDonald’s employees, the company’s CEO Chris Kempczinski said “Our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”
The news must be particularly disappointing to Donald Trump, a notorious consumer of the chain’s products since he’ll be unable to access his preferred meal on his next jaunt to Moscow.
Joining McDonald’s shuttering of its stores in Russia today was Starbucks, the Seattle coffee megalith that only last Friday tried to placate its outraged customers by announcing that it would be donating profits from its 130 Russian stores — all of which are owned and operated by a Kuwait-based franchisee — to charities focusing on Ukrainian humanitarian relief.
Today, Starbucks President and CEO Kevin Johnson told employees that it was upping the ante in Russia by agreeing to temporarily close its Russian outlets while reassuring them that the franchisee’s 2,000 Russian employees would also continue to get paid.
“Through this dynamic situation, we will continue to make decisions that are true to our mission and values and communicate with transparency,” Johnson wrote in an open letter to Starbucks staff.
Putin cancelled again as major U.S. food companies suspend business in Russia already beleaguered Russian elite, stripped of their credit cards and foreign bank accounts will now have to find an alternative source for the daily caffeine fix, it appears.
It also looks like the opposing parties in the cola wars have joined forces against Putin and Russia as both Coca-Cola and Pepsi declared that they would mostly suspend their business in the country.
Coca-Cola’s announcement was slim on details, but it does the majority of its business in Russia through a bottling partner, the Swiss-based Coca-Cola Hellenic Bottling Co. in which it owns a 21% stake.
Pepsi, on the other hand, while suspending sales of its drinks, noted that it would continue to produce and sell milk, baby formula, and baby food in order to support its 20,000 Russian employees and the 40,000 Russian agricultural workers who make up its supply chain in the region.
Pepsi has had the longest history of any of the U.S. companies in Russia, having first ventured into the market in the early 1960s when it was still part of the Soviet Union in what was an extraordinary business deal by a capitalist company in a Communist country at the time.
In addition to the fast food and beverage companies, multi-national conglomerate General Electric also announced today that it would be partially suspending its operations in Russia, keeping open only its essential medical equipment division and its support services for Russian power generation facilities.
The swift reaction by both governments and private companies to the illegal invasion of Ukraine by Russia is putting Putin in a much more threatened position after what he thought would be a lightning-quick blitzkrieg to occupy Ukraine proved to be much slower and more difficult than he anticipated.
With anti-war Russians already taking to the streets of cities across the country to protest a war entered into by their autocratic leader, Putin’s gamble on war to boost his standing in the country runs the risk of failing miserably as the Russian people find themselves cut off from many of the luxuries that 30 years of international openness have provided them.
For the want of a Big Mac, the war was lost? We’ll see soon enough.
Original reporting by Dee-Ann Durbin at The Washington Post.
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Vinnie Longobardo is the Managing Editor of Occupy Democrats. He's a 35-year veteran of the TV, mobile & internet industries, specializing in start-ups and the international media business. His passions are politics, music, and art.