Following Russia’s invasion of Ukraine, PepsiCo, Coca-Cola, McDonald’s, and Starbucks each announced on Tuesday that they are suspending operations in the country, a symbolic gesture by four major American corporations.
Even when the business had to trade its soda concentrate for Stolichnaya vodka and warships, Pepsi has sold its products in Russia for more than six decades. Just months before the Soviet Union fell apart, McDonald’s opened its first location across the Iron Curtain in Moscow.
Pepsi, Coke, McDonald’s, and Starbucks have been under fire in recent days for continuing to operate in Russia. This is because, as other American corporations have announced bans and sales pauses.
Yale Professor Jeffrey Sonnenfeld gathered and made public a list of American corporations that withdrew from Russia after President Vladimir Putin’s invasion, as well as those that did not. Coke was one of the most well-known names on the spreadsheet until Tuesday afternoon.
Russia is one of the few places in the world where PepsiCo, Coke’s rival, has a stronger presence. Coke’s business in Ukraine and Russia contributed around 1% to 2% of its consolidated net operating revenue and operating income in 2021, according to a regulatory filing.
Pepsi, on the other hand, generates about 4% of its annual sales in Russia, although not suspending all operations there. Some critical products, such as baby formula, milk, and baby food, will continue to be sold, according to the business.
It announced that they will halt the sales of Pepsi-Cola, 7UP, and Mirinda in Russia, as well as capital investments and all advertising and promotional activities.
Pepsi was reportedly considering various options for its Russian business, including writing it off, according to the Wall Street Journal. The process of selling Russian assets has been considerably hampered by economic sanctions.
Starbucks And McDonalds Suspend Business In Russia
Many American corporations have sought to decrease their exposure in both Russia and Ukraine since the Russian invasion of Crimea in 2014. McDonald’s, for example, has sold off some of its company-owned restaurants to local franchisees.
McDonald’s announced on Tuesday that all 850 of its Russian locations would close for the time being. Until then, the fast-food business had remained deafeningly silent on the war. They receive harsher condemnation than the few restaurants that criticized the invasion but kept their doors open.
The firm owns about 84 percent of McDonald’s Russian restaurants, while franchisees operate the rest. Having more restaurants implies more money for the corporation, but it also means more risk in times of economic crisis.
Starbucks went one step further than McDonald’s, announcing that it would halt all Russian business operations, including product shipments. In a letter sent on Friday, Starbucks CEO Kevin Johnson condemned the attacks.