Hundreds of Soviet patrons queue outside the first McDonald’s restaurant in Moscow
(Picture: Reuters)One of the largest corporate boycotts in history has left the economy of Vladimir Putin’s Russia reeling.
Businesses have shut shops on Moscow’s high streets, closed corporate headquarters and distribution centres, and shut factories.
Golden Virginia tobacco maker Imperial Brands, rival Philip Morris, Mothercare and Nestle are the latest businesses to announce a full or partial shutting of operations in Russia. Over 300 businesses have withdrawn from the country since the invasion of Ukraine, according to the Yale School of Management.
The boycott - combined with international sanctions - has pushed Russian inflation to a 24-year high, pushed the Kremlin to the brink of default and sent the value of the rouble tumbling.
Here are some of the most notable exits:
McDonald’s
McDonald’s has a rich history in Russia: the opening of its first restaurant in Moscow became a worldwide media event. A reported 30,000 people lined up at its restaurant on the first day of operations in 1990.
The fast food giant finally bowed to immense consumer and social media pressure this week to announce what it said would be a temporary closure of its 850 - mainly fully owned - locations in Russia.
The company’s chief executive Chris Kempczinski said the conflict in Ukraine and the humanitarian crisis in Europe had caused “unspeakable suffering to innocent people” and McDonald’s joined “the world in condemning aggression and violence and praying for peace.”
The chain will continue to pay full salaries to its 62,000 employees and it has donated $5 million (£3.8 million) to the company’s Employee Assistance Fund.
McDonald’s interests in Russia and Ukraine represent 9% of its overall annual revenue, or around $2 billion (£1.5 billion).
BP and Shell
BP effectively kicked off the corporate boycott of Russia by exiting its joint venture with Russian state oil giant Rosneft at a cost of $25 billion. Shell followed shortly thereafter, exiting a joint venture with gas company Gazprom.
Shell has since gone further, vowing to stop buying any Russian oil and announcing the closure of its petrol and aviation fueling stations in Russia.
Coca-Cola and Pepsi
Soft drink behemoth Coca-Cola, which had been under similar pressure to McDonald’s to cease business in Russia, has also shut its operations and said it would “monitor and assess the situation” as circumstances involved.
Coca-Cola’s Russian operation has 36,000 employees. The company simply said it would “thoughtfully consider” their interests and those of customers and suppliers in Russia.
“Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,” a statement from the company read.
Coca Cola has ten bottling plants across the Russian state. It’s closest rival PepsiCo has also closed two bottling sites temporarily. Russia represents an estimated 4% of global sales for both companies’ combined.
Starbucks
Coffee chain Starbucks has pledged to temporarily close its 130 locations in Russia, where it has 2,000 employees.
Kevin Johnson, chief executive of Starbucks, said: “We continue to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia.”
He pledged to “provide support to the nearly 2,000 partners in Russia who depend on Starbucks for their livelihood.”
Dove soap and Olay makers
Unilever, the parent company of brands including Dove soap, Ben & Jerry’s and Marmite, and Procter & Gamble (P&G), manufacturers of Olay among many other brands, have suspended all media, advertising and promotional activity in Russia in response to its invasion of Ukraine.
Unilever chief executive Alan Jope called Russia’s invasion of Ukraine a “brutal and senseless act by the Russian state”, and stated that the company had also suspended all imports and exports of its products into and out of Russia. Unilever is estimated to have up to 5,000 employees in Russia.
Some 2,500 P&G employees reside in Russia, an estimated 1,000 of which work in offices in Moscow.
Other food manufacturers are taking similar actions: Kellogg has suspended all operations and Kraft Heinz has stopped all imports and exports.
In the tech space, Apple, Amazon, Google, and Tik Tok have all suspended services, while Facebook-owner Meta has stopped running Russian ads.
Bans include software, covered by sanctions, and hardware.
Apple said in a statement: “We are deeply concerned about the Russian invasion of Ukraine and stand with all of the people who are suffering as a result of the violence.”
Samsung has suspended shipments over “geopolitical developments”. The South Korean tech company is Russia’s largest smartphone manufacturer.
Airbnb has blocked Russians from booking rooms on its platform and dropped Russian listings from its site.
Visa, MasterCard, AmEx
Mastercard suspended its network services in Russia at the weekend. Russian banks will no longer be supported by the Mastercard network regardless of whether their cards are used inside or outside the country.
Mastercard has around 200 employees in Russia supporting company operations.
Visa said it would work with its clients and partners within Russia to cease all Visa transactions over the coming days.
American Express cards will no longer work at merchants or ATMs in Russia. Additionally, cards issued locally by Russian banks will no longer work outside of the country on the American Express global network.
The dropping of Russia from these card networks could do a huge amount of economic damage by shutting down credit access.
Ford, Ferrari and Jaguar
Other consumer-facing brands that have halted sales in Russia include the UK carmakers Jaguar Land Rover and Aston Martin.
Internationally, Ford, GE, Ferrari and Mercedes Benz owner Daimler have all curtailed operations in the country. US motorcycle maker Harley Davidson has also suspended all business.
Zara, H&M, Adidas
Many fashion brands and retailers are taking part in the boycott.
At the top of the market, Burberry, Canada Goose and LVMH - owner of luxury brands including Louis Vuitton - have stopped shipments and shut shops in a blow to oligarchs.
Retailers including H&M and Zara-owner Inditex have curtailed activities in Russia.
And brands ranging form jean maker Levi to Adidas and Nike have stopped shipping to the country. IKEA and Lego have also joined the international corporate shunning.
EY, HSBC, JPMorgan
The exodus extends to finance and professional services: UK-based “big four” business consultants and accountants – Deloitte, EY, KPMG and PwC – have insisted they will shut their Russia offices. Most major consultants, including Bain and McKinsey, have cut back on business.
Banks are pulling out too, including major international players HSBC and JPMorgan.
Disney, Warner Brothers, Netflix, Spotify, Universal
Russians are also having their entertainment cut off: streaming services Netflix has suspended operations there and studios including Disney, Warner Brothers, Sony and Universal have pledged not to release new films there for the foreseeable future.
Spotify has shut its offices in Russia in response to what it called Moscow’s “unprovoked attack” on Ukraine.
KFC
KFC owner Yum! Brands has agreed to suspend operations at 70 company-owned restaurants and is finalising an agreement to suspend all of its 50 Pizza Hut outlets.
However, Yum! has 1,000 KFC restaurants in Russia, the majority of which are run by franchisees. The company had already suspended all investment and restaurant development in Russia.
Instead of closing its sites in Russia, Burger King is said to be donating the profits from its 800 franchised restaurants in Russia to Ukrainian relief efforts.
This will include an immediate $1 million (£760,000) donation to the United Nations refugee agency and, while Burger King franchisees in more than 25 countries across Europe are partnering with local charities to distribute $2 million (£1.5 million) in free Whopper meal vouchers to Ukrainian refugees that arrive in those countries.
