McDonald’s, PepsiCo, Coca-Cola and Starbucks stopped sales of their best-known products in Russia on Tuesday, offering a united rebuke of the war on Ukraine by companies that define America for much of the world.
Pepsi and McDonald’s were corporate pioneers whose work with the Soviet Union and the post-Soviet Russian state decades ago was seen as improving international relations.
All four companies have major operations in Russia.
McDonald’s Closes Restaurants
McDonald’s noted that it would go on paying salaries to its 62,000 employees in Russia as it closed 847 restaurants.
The first location to open in Russia, in central Moscow’s Pushkin Square in 1990, became a symbol of flourishing American capitalism as the Soviet Union fell.
“I’m glad they came around and made the right decision,” Jeffrey Sonnenfeld, a professor at the Yale School of Management who is tracking major companies’ stances on Russia, said after the move by McDonald’s.
“It’s a really important impact, and it’s symbolic as much as it is substantive.”
Starbucks and Pepsi
The Starbucks Corporation is temporarily closing hundreds of stores.
PepsiCo, Inc. will suspend all advertising in Russia and stop the sale of its drinks brands while continuing to sell essentials, such as milk and baby food.
Rival Coca-Cola noted that it will suspend its business there.
Coca-Cola was the official drink of the 1980 Olympic Games in Moscow, despite the United States boycotting the event in protest of the Soviet invasion of Afghanistan.
Scores of other companies also have rebuked Russia, and Amazon.com, Inc. highlighted on Tuesday that it would stop accepting new customers for its cloud services in Russia and Ukraine.
Universal Music suspended all operations in Russia, and online dating service Bumble, Inc. will remove its apps from stores in Russia and Belarus.
Royal Dutch Shell
Earlier, Royal Dutch Shell Plc stopped buying oil from Russia and announced that it would cut links to the country entirely, while the United States stepped up its campaign to punish Moscow by banning Russian oil and energy imports.
Moscow has termed the attack a ‘special military operation’ aimed not at occupying territory, but at destroying Ukraine’s military capabilities.
The West’s moves to isolate Russia economically for attacking its neighbour have hit global commodity and energy markets hard, sending prices soaring and threatening to derail the nascent recovery from the Covid-19 pandemic.
Britain, too, announced that it would ban imports of Russian oil, but only by gradually phasing them out during 2022, to give businesses time to find alternative sources of supply.
The London Metal Exchange (LME) halted trade in nickel on Tuesday, after prices of the metal – a key component in electric vehicle batteries – doubled to more than $100,000 a tonne.
Shell’s decision to abandon Russia comes days after it faced a barrage of criticism for buying Russian oil – a transaction that two weeks ago would have been routine.
“We are acutely aware that our decision last week to purchase a cargo of Russian crude oil to be refined into products like petrol and diesel – despite being made with security of supplies at the forefront of our thinking – was not the right one, and we are sorry,” Ben van Beurden, chief executive, said.
Shell and rivals BP Plc and the Exxon Mobil Corporation have all announced plans to sell holdings in Russia and exit the country, leaving France’s TotalEnergies relatively isolated in hanging on to its investments there.
Mining group BHP warned that the surge in commodity prices could spill over into already skyrocketing inflation and potentially affect global growth.
Nickel prices soared when China’s Tsingshan Holding Group – one of the world’s top nickel and stainless steel producers – bought large amounts of nickel to reduce its bets that prices would fall, said three sources familiar with the matter.
Tsingshan and the LME declined to comment.
As well as high-grade nickel, the price of other metals used in car production – from aluminium in bodywork to palladium in catalytic converters – has soared, and industry supply chains have been broken.