Moscow: As Russia’s invasion of Ukraine enters the 14th day, three more companies – McDonald’s, Coca-Cola and Starbucks – have announced the closure of business in Putin’s country, joining the growing list of international businesses leaving the country, media reports said.
Netflix, TikTok, Samsung, and credit card operators have already left Russia as reputational and financial risks mount, Bloomberg reported on On March 7.
Dozens of companies have stopped operations in Russia in the wake of its “special operation” in Ukraine as countries across the world continue to condemn the act and impose sweeping sanctions in the bid to bring Russia to its knees.
McDonald’s said the move was a response to the “needless human suffering unfolding in Ukraine”, BBC reported.
Financial restrictions on SWIFT and capital controls added with international sanctions, the closure of airspace and transports links due to the war have blocked the possibility of doing any business for many companies to supply parts, make payments and deliver goods to and from Russia, according to the Bloomberg report.
The companies also face potential international consumer backlash and loss of image if perceived as aiding Vladimir Putin’s regime, triggering an exodus of corporations from Russia.
The sudden panicked rush to leave Russia, reverses thirty years of investment there by international businesses after the Soviet Union fragmented in 1991, especially by energy companies.
McDonald’s said it was temporarily closing its roughly 850 restaurants in Russia, while Starbucks also said its 100 coffee shops would shut, according to the BBC report.
“The conflict in Ukraine and the humanitarian crisis in Europe has caused unspeakable suffering to innocent people,” chief executive Chris Kempczinski said in a memo to staff that was shared publicly.
“As a system, we join the world in condemning aggression and violence and praying for peace.”
According to the report, McDonald’s said it would continue to pay its nearly 62,000 employees in Russia.
McDonald’s ran a majority of its stores in Russia. Along with Ukraine, the restaurants account for about 9 percent of the firm’s revenue and about 2 percent of global sales, the report said.
War has forced the company to temporarily shut its 108 restaurants in Ukraine, where it continues to pay salaries and has given $5m to an employee assistance fund.
Unilever, which of Marmite, Dove beauty products and PG Tips among other brands, also said it had stopped trade with Russia and planned to suspend its advertising and media spending and investments there, Bloomberg reported.
Pepsi, which has a larger stake in Russia than arch-rival Coca-Cola, said it was suspending the production and sale of Pepsi and other global brands in the country, adding that it was suspending capital investments and advertising, accusing Russia of the “horrific events” in Ukraine.
However, the company said it would continue to provide other products in Russia.
“As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business,” boss Ramon Laguarta said. “That means we have a responsibility to continue to offer our other products in Russia, including daily essentials such as milk and other dairy offerings, baby formula and baby food.”
Russia’s largest foreign investor, BP Plc, led the way with its surprise announcement on Feb. 27 that it would exit its 20 percent stake in state-controlled Rosneft, a move that could result in a $25 billion write-off and cut the company’s global oil and gas production by a third.
Shell Plc said it would wind partnerships with Russian government-controlled Gazprom, including the Sakhalin-II liquefied natural gas facility and its involvement in the Nord Stream 2 pipeline project, which Germany blocked last week, stated the Bloomberg report.
On February 28, British energy giant BP offloaded a 19.5 percent stake in oil Russian company Rosneft (ROSN.MM) in the wake of Russia’s invasion of Ukraine.
Norway’s state-owned energy giant Equinor ASA said it will start exiting its joint ventures in Russia, worth about $1.2 billion.
Simultaneously, Norway’s sovereign wealth fund, which is also the world’s largest, said it was freezing Russian assets worth nearly $2.8 billion and will come up with a plan to exit by March 15, reported Bloomberg.
Visa and Mastercard said on Saturday they are suspending operations in Russia.
American Express followed on Sunday.
Within just a week, the majority of the world’s biggest car manufacturers including General Motors Co., Ford Motor Co., Volkswagen AG, and Toyota Motor Corp. announced the suspension of shipments to Russia or idle plants in the country. Volvo AB and Daimler Truck Holding AG, which manufacture trucks, also stopped business activities there.
Levi Strauss & Co. is stopping commercial operations in Russia, where it gets about 2 percent of its sales, according to the Bloomberg report.
South Korean company Samsung which is the biggest smartphone seller in Russia with over 30 percent of the market, stopped exports to the country of all its products.
Samsung announced a donation of $6 million to humanitarian efforts in the region, including $1 million in consumer electronics products.
Condemning Russia’s “unjustified, unprovoked and unlawful invasion” of Ukraine, Microsoft on Friday and said it was suspending all new sales of products and services in Russia.
Apple Inc. has also stopped sales of iPhones and started limiting Apple Pay services and other popular products in Russia and removed the RT News and Sputnik News applications from App Stores outside the country.
HP, the largest supplier of PCs to Russia, has stopped exports to the country as has Intel Corp, the Bloomberg report stated.
India Blooms News Service