Business

McDonald's, Starbucks, Coke, Pepsi join companies suspending business in Russia

Following pressure on social media, McDonald's, Starbucks, Coca-Cola and Pepsi are the latest companies suspending business in Russia to protest the country's invasion of Ukraine. 

There are growing calls to boycott companies not taking a stand against Russia

Multinational companies, including McDonald's, are facing pressure to take a stand on the Russian invasion of Ukraine by ceasing business operations in Russia. (Lucy Nicholson/Reuters)

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 companies 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. 

Starbucks announced Tuesday it will close all stores and suspend business operations in Russia. (Starbucks/Nicholas Matthews Photography)

Coca-Cola and PepsiCo were initially silent about their plans, but 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. 

The companies join more than 300 businesses 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 35 companies that still have "significant exposure" in Russia. A number of those businesses, such as Burger King, KFC and Nestlé have 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 is calling on multinational companies to stop doing business in Russia. (submitted by Sherry Zak)

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

Nestlé did not respond to requests for comment about its position in Russia. 

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., EU, 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.

RBI also said it is redirecting profits from operations in Russia to humanitarian efforts in Ukraine.

Yum! Brands said it's finalizing an agreement to close its 50 Pizza Huts in Russia and will suspend operations of its 70 company-owned KFCs in the country. The remaining 930 KFCs operated by independent owners will remain open. 

Yum! Brands also said it is redirecting profits to humanitarian efforts.

WATCH | Major brands suspend operations in Russia: 

Major brands suspending business in Russia

4 months ago
Duration 1:59
McDonald’s, Coca-Cola and Starbucks are among a long list of multinational companies that have suspended operations in Russia. Big brands have faced mounting public pressure to sever ties with the country over its war in Ukraine.

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."

ABOUT THE AUTHOR

Sophia Harris

Business reporter

Based in Toronto, Sophia Harris covers consumer and business for CBC News web, radio and TV. She previously worked as a CBC videojournalist in the Maritimes where she won at Atlantic Journalism Award for her work. Contact: sophia.harris@cbc.ca

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