On Tuesday, McDonald’s and Starbucks announced that they were pulling out from Russia. Coco-Cola also said that they would suspend their operations in response to Russia’s invasion of Ukraine.
These companies became the latest in line to bow down to public pressure and halt their operations in Russia. Over 300 companies have withdrawn from the country over its aggressive assault of Ukraine.
McDonald’s CEO Chris Kempczinski said, “McDonald’s has decided to temporarily close all our restaurants in Russia and pause all operations in the market.”
He continued that while the company employed 62,000 people, served millions of Russian customers every day, and had become an essential part of 850 communities in the 30 years they have operated in the country– their values could not allow them to ignore Ukraine’s plight.
“Our values mean we cannot ignore the needless human suffering unfolding in Ukraine,” he said.
According to an investor document, there were 847 locations of McDonald’s in Russia at the end of last year. The combined revenue of Russia and Ukraine’s restaurants accounted for 9% of the company’s earnings in 2021.
Starbucks CEO Kevin Johnson told his employees on Tuesday that the company had decided to suspend all business activity, and pause the shipment of Starbucks products to Russia.
“Our licensed partner has agreed to pause store operations immediately and will provide support to the nearly 2,000 [employees] in Russia who depend on Starbucks for their livelihood.”
“We condemn the horrific attacks on Ukraine by Russia, and our hearts go out to all those affected,” he added.
Coca-Cola also followed suit by suspending its operations in Russia till the situation changed.
“Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,” the company stated.
Response from Moscow
In response to Western companies abandoning operations in Russia, Russian Prime Minister Mikhail Mishustin announced capital controls designed to stop the exodus. The controls prevent companies under “political pressure” from selling Russian assets until the pressure subsides. Â
State news agencies TASS and RIA quoted Mikhail saying,
“To enable businesses to make informed decisions, a draft presidential decree has been prepared to introduce temporary restrictions on exiting Russian assets. We expect that those who have invested in our country will be able to continue working here.” Â
The ruble has fallen to one cent against the US dollar due to severe sanctions against Russia, which has played havoc with the Russian financial system.
In response, Moscow has implemented several emergency measures to stabilize the system by doubling the interest rates to 20% and temporarily banning Russian brokers from selling securities held by foreigners.
The government has also ordered exporters to exchange 80% of their foreign currency for rubles and banned Russian residents from making any bank transfers outside Russia. Mishustin confidently stated,
“I am sure that the sanctions pressure will eventually subside, and those who will not curtail their projects in our country, succumbing to the slogans of foreign politicians, will win.”
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