When communism in the Soviet Union fell apart thirty years ago, Western companies increased their presence in Russia.
The advent of major Western corporations signaled the beginning of a new era, with Russians becoming avid consumers of brands ranging from McDonald's fast food to Levi's jeans and luxury products. Following President Putin's invasion of Ukraine, a rising number of businesses have halted operations in Russia.
Following rising pressure to act before current Russia conditions, McDonald's, Coca-Cola, Starbucks, and Heineken have announced they are ceasing operations in Russia. McDonald's announced the temporary closure of its 850 outlets in Russia, while Starbucks announced the closure of its 100 coffee shops.
According to Anna MacDonald, a fund manager at Amati Global Investors, the companies originally kept quiet about the issue, but took action because shareholders "wouldn't stand" for the continuous generation of profits from Russia. "It was hurting their share prices," she told the BBC, "and the opinion was that it was just totally improper to continue doing so."
Pepsi, which employs 20,000 people in Russia and has a significantly greater footprint than rival Coca-Cola, announced that production and sales of Pepsi and other worldwide brands would be halted, but the corporation will continue to provide other goods.
Following the same measures Nestle, Mondelez, Procter & Gamble, and Unilever have all announced that they will no longer invest in Russia, but will continue to provide essentials. Because it is "no longer sustainable in the current context," British American Tobacco has announced plans to sell its operation in Russia.
News source:
(2022, March 11). Spotify stops streaming in Russia over safety concerns. BBC News. Retrieved March 27, 2022 from https://www.bbc.com/news/business-60571133.
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