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McDonald's, Coca-Cola, PepsiCo and Starbucks join a corporate exodus from Russia

D. Lockhart

Mar 8, 2022

McDonald's, Coca-Cola, PepsiCo and Starbucks join a corporate exodus from Russia

McDonald's says it is temporarily closing all of its 850 restaurants in Russia in response to the invasion of Ukraine. Charlie Neibergall/AP

McDonald's, Coca-Cola, PepsiCo and Starbucks are the latest American corporate titans to join the corporate exodus from Russia in the wake of the invasion of Ukraine.

In a letter to its partners on Tuesday, Starbucks CEO Kevin Johnson announced that the coffee giant would suspend all business in Russia. Johnson said the store's licensed partner has agreed to pause operations at its 130 stores there.

And Coca-Cola announced that it is suspending its business in Russia. "Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine," the soft drink giant said in a brief statement.

PepsiCo, which has been operating in Russia for more than 60 years, said that, "given the horrific events occurring in Ukraine," it was suspending sales of Pepsi-Cola and its other global beverage brands there. It will also suspend capital investments and advertising in Russia. The company said it will continue to sell milk, baby formula and baby food in the country.

Meanwhile, McDonald's is temporarily closing its 850 locations in Russia, in one of the most symbolic exits by a global corporation from the country in protest over Russia's invasion of Ukraine.

In an email to employees and franchisees on Tuesday, McDonald's CEO Chris Kempczinski said the fast-food chain will pause all operations in Russia. He said the company will continue paying salaries to 62,000 people it employs there.

"Our values mean we cannot ignore the needless human suffering unfolding in Ukraine," Kempczinski said. "At this juncture, it's impossible to predict when we might be able to reopen our restaurants in Russia."

Hundreds of companies have announced their exits from Russia in recent days. Among the most recent additions to the list are cosmetics company L'Oreal and car maker Ferrari. Russian users are also losing access to Netflix, Ikea stores and Apple products. Visa and Mastercard have restricted use by Russian holders.

Earlier Tuesday, Yum Brands, which runs KFC and Pizza Hut locations in Russia, also paused investment in the country. And on Monday, giant conglomerate Procter & Gamble cut back on its products and advertising in Russia.

Hundreds of people line up around the first McDonald's restaurant in the Soviet Union at Moscow's Pushkin Square, on its opening day, Jan. 31, 1990. Alexander Zemlianichenko/AP

A Yale professor tracks which companies are still doing business in Russia

As many companies continue to pull out of Russia, a Yale professor is tracking which companies have not curtailed operations in the country. Among them was McDonald's, which opened its first location in the Soviet Union in 1990 as a harbinger of the arrival of Western consumer culture.

Jeffrey Sonnenfeld, senior associate dean for leadership studies, tells NPR that the list — which contains more than 200 companies — is a way to encourage corporations "to do the right thing" and to hold them accountable for continuing to engage with Russia.

Publishing the list allows companies to see that others are taking action amid the conflict; it's affirming, he said, and something that can make other companies feel better about the decision. That's what Sonnenfeld called the "carrot."

"The stick side is the public shaming of being on a category where they don't want to be," he said.

Sonnenfeld and his team have been tracking company withdrawals since the outbreak of war, he said. Companies such as Dell, Apple, Nike, General Motors, IBM and H&M were among the first to curtail operations in Russia, he said.

Some companies released ambiguous statements, which drove Sonnenfeld and his team to catalog the companies.

"We're shocked about what a catalytic effect an objective list has had in terms of either catalyzing some to move or clarifying positions," Sonnenfeld said. "We're very close to 300 now that have curtailed operations."

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