NATIONAL NEWS

McDonald’s is shutting down its Russian restaurants

Mar 8, 2022, 11:42 AM | Updated: Jun 8, 2022, 3:18 pm
...

(CNN) — McDonald’s is temporarily closing its locations in Russia.

“McDonald’s has decided to temporarily close all our restaurants in Russia and pause all operations in the market,” CEO Chris Kempczinski said in a statement Tuesday.

There were 847 locations of McDonald’s in Russia at the close of last year, according to an investor document.

Globally, most McDonald’s locations are operated by franchise operators. But that’s not the case in Russia, where 84% of locations are operated by the company, according to the document. Russia’s restaurants, along with another 108 in Ukraine, all operated by McDonald’s, accounted for 9% of the company’s revenue in 2021, according to the document.

“In Russia, we employ 62,000 people who have poured their heart and soul into our McDonald’s brand to serve their communities. We work with hundreds of local, Russian suppliers and partners who produce the food for our menu and support our brand,” Kempczinski said. “And we serve millions of Russian customers each day who count on McDonald’s. In the thirty-plus years that McDonald’s has operated in Russia, we’ve become an essential part of the 850 communities in which we operate.”

But, he added, “at the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”

Several Western companies across multiple industries have halted operations in Russia after the country’s attack on Ukraine.

Yet some big players in the food space are continuing to sell their products in the country. Others are starting to clarify their positions more explicitly.

Critics of Russia’s actions are pressuring some of these brands to pull out of the country.

But there are a number of reasons for food companies to stay in Russia when so many other businesses are turning their backs. The supply chain can be more complex for food sellers than other industries. Many restaurant chains are operated by franchises, giving corporate owners less control. Beverage makers, like Coca-Cola, rely on regional bottlers and distributors to sell their products.

Proponents of the food industry remaining in Russia think they have a responsibility to stay, and fear the implications of such a move for Russian citizens, many of whom want nothing to do with the war.

 

Food companies in Russia

 

In 2020, PepsiCo recorded about $3 billion in net salUPes in Russia. PepsiCo, did not immediately respond to a request for comment on its Russia operations.

Coca-Cola products are sold in Russia through independent bottler Coca-Cola Hellenic Bottling company. During a February 22 discussion of full year earnings results, Coca-Cola HBC CEO Zoran Bogdanovic pointed to Russia and Ukraine as an important driver of growth. “We’ve continued to drive strong performance in Nigeria, Russia and Ukraine, with all three now having volumes more than 20% above 2019,” he said.

Coca-Cola HBC and Coca-Cola did not respond to requests for comment on their operations in Russia, but a statement from Bogdanovic appears on his company’s website.

“Our thoughts are with all those affected, and we are doing everything we can to support our people, their families, and the humanitarian relief efforts in Ukraine and the region,” he wrote, adding that along with Coca-Cola, his company has donated one million euros to the Red Cross in Ukraine, and is offering more support to neighboring countries and Ukrainian employees.

The letter doesn’t mention Russia, however, or how the company is proceeding there.

Some people have strong opinions about how these companies should proceed.

Twitter users are employing the hashtags #boycottMcDonald’s, #boycottCoke, and #boycottPepsi because of the companies’ operations in Russia.

New York State Comptroller emailed a number of companies represented in the New York State Common Retirement Fund, including PepsiCo and McDonald’s, urging them to stop doing business with Russia.

“Companies like McDonald’s and PepsiCo, which have a large footprint in Russia, need to consider whether doing business in Russia is worth the risk during this extraordinarily volatile time,” NaPoli said in a statement.

 

Danone and Yum speak out

 

Danone, which makes Silk milk alternatives, Activia, Oikos yogurt, baby formula and more, has offered some more insight into its operations in Russia.

In a LinkedIn post on Sunday, the company said it and its employees “express their solidarity with the people who are now suffering the atrocities of war,” adding that it has “made a donation of 500,000 euros to the Red Cross.”

The company also detailed its plan for Russia.

“We have decided to suspend all investment projects in Russia,” the company said, “but currently maintain our production and distribution of fresh dairy products and infant nutrition, to still meet the essential food needs of the local population.”

The company also said that “this war could last for a long time. If so, it will lead to increasing difficulties for the population affected to get hold of basic goods.”

Yum Brands, which owns KFC, Pizza Hut, Taco Bell and the Habit Grill, said in a statement that it “has suspended all investment and restaurant development in Russia.”

The company added that it will “redirect all profits from operations in Russia to humanitarian efforts,” in addition to making donations to the Red Cross through the Yum Brands Foundation. Yum has about 1,000 KFC restaurants and 50 Pizza Hut locations in Russia. The company said that most of these are operated by independent owners.

Farryl Bertmann, a registered dietician and senior lecturer in the nutrition and food sciences department at the University of Vermont, warned that if big food companies leave Russia the citizen population could suffer, even if they have other sources of food.

“I feel very strongly that people should be given the opportunity to purchase a variety of foods at different price points,” she said. “That can only be successfully done if access is there.”

Bertmann pointed out that Coke and Pepsi make more than just sugary sodas.

Coca-Cola sells water, juice, milk and other beverages. PepsiCo makes a number of non-soda beverages, and owns Quaker oats and snacks as well as other food brands.

“Ultimately, foods need to be made available,” she said. “And I would be very concerned if the food environment [were] to dramatically change.”

KSL 5 TV Live

Top Stories

National News

A graphic image of a plane-like spacecraft...
Ashley Strickland

Cosmic seaplanes and self-growing bricks could help us explore other worlds

What are the emerging technologies that could provide new ways of studying the universe?
12 hours ago
A man works at an avocado orchard in Santa Ana Zirosto, Michoacan state, Mexico, Thursday, Jan. 26,...
Associated Press

Route to Super Bowl is long, dangerous for Mexican avocados

It is a long and sometimes dangerous journey for avocados destined for guacamole on tables and tailgates in the United States during the Super Bowl.
12 hours ago
US Secretary of State Antony Blinken has postponed his upcoming trip to China in response to the fl...
Jennifer Hansler, Kevin Liptak, Jeremy Herb, Kylie Atwood, Jim Sciutto and Oren Liebermann

Blinken postpones trip to Beijing after Chinese spy balloon spotted over US

US Secretary of State Antony Blinken has postponed his trip to China in response to a suspected Chinese spy balloon.
2 days ago
An Iowa Alzheimer's care facility is facing a $10,000 fine after pronouncing a woman dead who was l...
Hannah Sarisohn

Residential care facility faces fine after woman pronounced dead found gasping for air in body bag

An Iowa Alzheimer's care facility is facing a $10,000 fine after pronouncing a woman dead who was later found alive when a funeral director unzipped her body bag, according to documents from the Iowa Department of Inspections and Appeals.
2 days ago
Three bodies found on Feb. 2 in the Detroit area are believed to be those of three rappers who have...
Joe Sutton and Emma Tucker

Bodies found in apartment identified as 3 Michigan rappers missing for almost 2 weeks, police say

Three bodies found in the Detroit area this week were identified by authorities Friday as those of three rappers who were missing for almost two weeks, according to Michigan State Police.
2 days ago
Tulare County Sheriff Mike Boudreaux speaks during a news conference Tuesday, Jan. 17, 2023, in Vis...
Associated Press

Authorities: 2 arrested in California shooting that killed 6

A California sheriff says two gang members suspected in the massacre of six people last month in central California have been arrested, one after a gunbattle.
2 days ago

Sponsored Articles

vintage photo of lighting showroom featuring chandeliers, lamps, wall lights and mirrors...
Lighting Design

History of Lighting Design | Over 25 Years of Providing Utah With the Latest Trends and Styles

Read about the history of Lighting Design, a family-owned and operated business that paved the way for the lighting industry in Utah.
Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
McDonald’s is shutting down its Russian restaurants