There is a list circulating of companies that have decided to stop doing business in Russia, at least temporarily, and the rush is on to get on the good side of that list. Given the outcry from the public against companies continuing to operate as normal in Russia, more are closing operations each day. On the twelfth day of the war in Ukraine, some major hold-outs joined the list.
Coca-Cola and Pepsi both continued to operate as usual as threats of boycotts began. During a pro-Ukrainian protest in Atlanta last weekend, a small group broke away to walk over to the front of Coca-Cola’s museum to chant, “Shame on Coca-Cola.” Security guards came out and moved them farther away from the front of the building.
Security quickly had them move further away. Lots of "shame on Coca-Cola" chants. pic.twitter.com/eDkxNHem3z
— Lautaro Grinspan (@lautarogrinspan) March 5, 2022
Coke “needs to stop contributing to Russian taxes, to their revenues, to their economy. They need to pull out,” said Irina Levterova Bhatia, a Ukrainian immigrant and Saturday rally-goer. “This is their chance to pick the right side of history.”
Pressuring Coke, according to Levterova Bhatia, is a way for Atlanta’s Ukrainian diaspora to make themselves useful.
“The beverage company is headquartered here. Atlanta is not a large, global city. We’re not London or Berlin. Our protest may be smaller, but we would like to make our opinions known where it matters.”
Tuesday the drink manufacturer announced on its website that it is suspending business in Russia and will monitor the situation.
“Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,” the statement read. “We will continue to monitor and assess the situation as circumstances evolve.”
Pepsi also joined in with its decision to stop sales on Tuesday for all but baby formula and other essential items. The last few days a hashtag campaign on social media – #BoycottPepsi – allowed consumers to weigh in to pressure the company.
New York state Comptroller Thomas DiNapoli sent a letter to several major companies including PepsiCo on Friday calling on them to halt operations in Russia.
He warned the companies that they face “significant and growing legal, compliance, operational, human rights and personnel, and reputational risks” by continuing to do business in the country.
A boycott from them would play a major role in “condemning Russia’s role in fundamentally undermining the international order”, he wrote, according to Reuters.
If you believe in freedom and democracy, we must stand with the ppl of Ukraine and urge the citizens of #Russia to fight for peace. Fight for peace. It’s time to end #Putin’s war of choice. https://t.co/xV4dgPb8jT
— Donna Brazile (@donnabrazile) March 8, 2022
Pepsi was one of the first Western products that was allowed in the former Soviet Union. The company, like other western companies slow to take the leap in support of Ukraine, is said to be concerned about its employees and consumers in Russia. Experts say that by continuing to operate in Russia, that decision actually does more harm than good. Yale University Professor Jeffrey Sonnenfeld, the person who put together the list mentioned above, is of the opinion that businesses are mistaken if they think Russians are being helped by doing business as usual.
He said that there is no “win-win solution” if they remain, whereas causing the Russian economy to collapse could help to prevent the situation escalating to “open warfare” in the country.
“This is one step away from open warfare. This is a last-ditch effort,” he said.
“You’re helping those workers by not having [the West] dropping bombs and shooting them.”
PepsiCo claims that Russia makes up about 4% of its global revenues. It claims to be the largest food and beverage manufacturer in Russia.
There is always the possibility that a brutal dictatorial mad man like Putin might completely snap and launch a nuke toward the United States but the U.S. isn’t going to bomb Russia or start a shooting war there. War between Russia and the United States is the beginning of World War III and nuclear war. I don’t think Putin is quite crazy enough to want that. At least not yet. Sonnenfeld’s logic seems a little bit hyperbolic.
McDonald’s, another hold-out until Tuesday, is also concerned about its employees in Russia so it will continue to pay them while their fast food restaurants are closed. McDonald’s will temporarily close over 800 locations in Russia.
CEO Chris Kempczinski informed employees in an email of the decision to “temporarily close” 850 McDonald’s franchise locations in Russia. Kempczinski said 62,000 employees would continue to receive compensation and that the Ronald McDonald House Charities in Russia would stay open.
“The conflict in Ukraine and the humanitarian crisis in Europe has caused unspeakable suffering to innocent people,” Kempczinski said in the email. “As a System, we join the world in condemning aggression and violence and praying for peace.”
“The situation is extraordinarily challenging for a global brand like ours, and there are many considerations,” Kempczinski added. “For 66 years, we have operated with the belief that communities are made better when there’s a McDonald’s nearby.”
Kempczinski noted that it isn’t only the employees who will be affected. The decision also affects business partners in Russia. “We work with hundreds of local, Russian supplies and partners who produce the food for our menu and support our brand.” He’s right about that. These business decisions made in support of Ukrainians will hurt Russian businesses and consumers alike. The pain felt by Russians, though will spur them on to oppose the war, as we already see thousands of ordinary citizens protesting in the streets. That is something almost unimaginable until now. Russians are boldly taking to the streets to protest though they are being arrested and who knows what will happen to them.
Starbucks is a new addition to the list, too. It will also pay its employees while stores are closed.
Starbucks CEO Kevin Johnson also confirmed in a note to global staff that the iconic coffee chain would be closing its 130 locations in Russia and halting all sales, but continuing to pay its 2,000 employees there. All the shuttered cafes are run by licensed owner-operators, rather than by the Seattle-based coffee giant itself.
The last “significant US-owned fast food chain still operating in Russia” is KFC. It owns 1,000 restaurants in Russia. Yum Brands, the parent company of KFC, also has 50 Pizza Hut locations. While it hasn’t shuttered restaurants, it will suspend investment and development of new restaurants in Russia. The profits from its operations in Russia will be donated to humanitarian efforts, according to a statement from Yum Brands. ‘Like so many across the world, we are shocked and saddened by the tragic events unfolding in Ukraine,’ a Yum Brands spokesman said.
So, instead of closing restaurants and paying its employees until restaurants can be re-opened, Yum Brands has decided to continue operating and donate its profits. That’s one alternative that will have less disruption to Russians who eat food from Yum Brands restaurants. This war won’t be over any time soon. There will likely be more companies that will decide to join the others with shows of support for Ukrainians.