American companies McDonald’s, Starbucks, Pepsi, and Coca-Cola finally decided to join the Russian boycott. As pressure mounts back home, these companies decided to suspend or close operations in Russia.
Coke, Pepsi, Starbucks, and McDonald’s Join Russian Boycott
As more people began asking American firms why they are still operating in Russia, many are now reevaluating their positions. On Tuesday, PepsiCo, Coca-Cola, McDonald’s, and Starbucks each said they are suspending business in Russia.
Joining the Russian boycott is a symbolic move by the four US brands to oppose the country’s invasion of Ukraine. Each company managed to establish a foothold in Russia, with some establishing a local market before the fall of the Soviet Union.
As a result, these companies profited from decades of doing business there. With the growing condemnation of Russia’s presence in Ukraine, the fours brands are among American companies drawing criticism as well.
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Pepsi To Suspend All Soda Business
Pepsi has been a Russian fixture for over 60 years now. In the 1990s, the company famously had to trade getting its soda business in Russia in exchange for selling Stolichnaya Vodka in the US.
Now, Russia is one of those territories where Pepsi has a larger presence than Coca-Cola. Coke reported that its combined Russian and Ukrainian market represents between 1-2% of its business worldwide. In contrast, Pepsi generates around 4% of its annual revenue there.
Pepsi announced that it will halt its soda in Russia, suspending sales of its Pepsi-Cola, 7UP, and Mirinda brands. It will also halt all planned capital investments and all advertising and promotional activities.
However, for humanitarian reasons, the company will continue selling essential food. This includes baby formula, milk, and baby food.
CEO Ramon Laguarta wrote a memo to employees explaining their decision to join the Russian boycott. “Now more than ever we must stay true to the humanitarian aspect of our business,” he wrote.
Coke Joins The Russian Boycott As Well
Meanwhile, Coca-Cola also went along with its competitor in joining the Russian boycott. Earlier, it became one of the more prominent names that surfaced from a list of companies still actively trading with Russia.
In a brief statement issued Tuesday, Coke sought to cease its operations in Russia. “Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine. We will continue to monitor and assess the situation as circumstances evolve.”
McDonald’s Closing its 850 Restaurants in Russia
Meanwhile, McDonald’s is temporarily closing all 850 of its restaurants in Russia. The company is one of the first multinational companies that managed to open a store in the Soviet Union. It opened its first store in Moscow just months before the collapse of the mighty USSR.
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McDonald’s has a larger presence in terms of operations and number of stores. As a result, it receives a higher share of its global revenue from company stores.
The company owns around 84% of McDonald’s Russian branches. Consequently, McDonald’s now holds a bigger risk during crisis times like what’s happening now.
Starbucks Also Joins Russian Boycott, Including Shipment of its Products
Meanwhile, coffee chain Starbucks went a step further than McDonald’s. The company announced it will now suspend all Russian activities.
This includes holding off shipment of its products to the country. CEO Kevin Johnson also condemned the attacks on Ukraine in his letter issued last week.
Watch the Star’s video reporting that McDonald’s, Starbucks, Coca-Cola, and Pepsi close Russian operations:
What do you think of Starbucks, McDonald’s, Coke, and Pepsi joining the Russian boycott? Do you think other American companies will follow suit?
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