Starbucks follows a mass exodus of American food companies that are pushing the economy for Russia to leave the country.
The Seattle coffee company will retire after suspending operations at its 130 cafes in March. It will mean the loss of nearly 2,000 jobs with Kuwait-based franchise operator Alshaya Group. It will continue to pay workers for the next six months.
“As we mentioned on March 8, we have suspended all commercial activity in Russia, including the shipment of all Starbucks products,” the company said in a statement. “Starbucks has made the decision to go out and stop having a brand presence in the market.”
MacDonald’s, Pepsi and Cocoa-Cola have announced that they will sell their operations in Russia. Fast food companies Pizza Hut, KFC and Taco Bell have halted operations in the country.
Starbucks’ decision to suspend operations in Russia is different from the approach taken by other foreign companies.
Seattle-based Starbucks has 130 stores in Russia, operated by its licensed Alshaya Group, with nearly 2,000 employees in the country.
Last week, McDonald’s said it was selling its restaurants in Russia to its local graduate Alexander Govor to change its name to a new name, but will retain its trademarks, while French Renault sells its majority stake in the Russia’s largest carmaker with an option to repurchase the stake.
A lot of other Western companies, including Imperial Brands and Shell, are severing ties with the Russian market by agreeing to sell their assets in the country or handing them over to local managers.
The coffee company does not keep the options to return.
In March, Starbucks closed its stores and suspended all commercial activities in Russia, including shipping its products to the country, following the invasion of Ukraine by Moscow.
Starbucks did not provide details on the financial impact of the exit. McDonald’s had said it would take on a mostly non-cash charge of up to $ 1.4 billion.
CEO Kevin Johnson said in March that he “condemns the horrific attacks on Ukraine by Russia and our hearts go out to all those affected.”
It has been a tough sleigh in Russia for the caffeine supplier from the beginning.
At first they were unable to enter the market because Sergei A. Zuykov, a trademark occupant, had the intellectual property rights in his name. The Russian lawyer offered to sell them his name for $ 600,000, but the company refused. In 2005, Starbucks finally won the name in a civil case.
The company opened its first outlet at Mega Khimki Mall in September 2007, followed three months later by a second branch in Arbat District.
Starbucks banned smoking at all of its Russian outlets in 2011, three years before smoking was banned in public places in the rest of the country.
Companies that stopped doing business in Russia
- McDonald’s
- KFC
- Taco Bell
- Pizza Hut
- Cocoa-Cola
- Pepsi
- Starbucks
- Uniqlo
- British American Tobacco
- Ikea
- H&M
- Canada Goose
- Nestlé
- Nike
- TJ Max
- Unilever
- BP
- Exxon Mobil
- Shell
- Volvo
- Siemens
- Renault
- Caterpillar
- Delta Air Lines
- United Airlines
- DHL
- Hilton Hotels
- Hyatt Hotels
- American Airlines
- Uber
- Sony
- Microsoft
- apple
- Netflix
- Bloomberg
- Walt Disney
- Warner Brothers
Although the company was not an official sponsor of the 2014 Olympic Games in Sochi, Russia, there was a secret coffee kiosk for NBC broadcasters, according to the Wall Street Journal.
In a statement to DailyMail.com on Tuesday, Yum Brands said it was suspending all investment and development of new restaurants in Russia and that it would give all the benefits of operations in Russia to humanitarian efforts.
“Like many around the world, we are shocked and saddened by the tragic events unfolding in Ukraine,” a Yum Brands spokesman said.
But so far, the company has resisted calls to close restaurants in Russia, which include about 1,000 KFC locations and 50 Pizza Huts.
Most of these locations work through franchise or license agreements, which can complicate the company’s ability to close them.
Coca-Cola said its business in Russia and Ukraine accounted for 1 to 2 percent of the company’s net operating income in 2021.
“Our hearts are with the people who are suffering the inconceivable effects of these tragic events in Ukraine,” the company said. “We will continue to monitor and assess the situation as circumstances evolve.”
Pepsi has two production plants in Russia and sells snacks and drinks in the country, according to its most recent annual report for 2021.
PepsiCo, whose soft drinks were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily commodities such as milk and other dairy products, infant formula and baby food. babies, in Russia.
“As many of you know, we have been operating in Russia for over 60 years and have a place in many Russian houses,” PepsiCo CEO Ramon Laguarta said in a note to global employees.
“However, given the horrific events in Ukraine, we are announcing the suspension of the sale of Pepsi-Cola and our global beverage brands in Russia, including 7Up and Mirinda,” he continued.
Laguarta said PepsiCo will also suspend capital investments and all advertising and promotional activities in Russia.
Pepsi has two production plants in Russia and sells snacks and drinks in the country, according to its most recent annual report for 2021.
PepsiCo, whose soft drinks were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily commodities such as milk and other dairy products, infant formula and baby food. babies, in Russia.
“As many of you know, we have been operating in Russia for over 60 years and have a place in many Russian houses,” PepsiCo CEO Ramon Laguarta said in a note to global employees.
“However, given the horrific events in Ukraine, we are announcing the suspension of the sale of Pepsi-Cola and our global beverage brands in Russia, including 7Up and Mirinda,” he continued.
Laguarta said PepsiCo will also suspend capital investments and all advertising and promotional activities in Russia.
He has also parked a Ronald McDonald House Charities mobile health care unit on the Polish border with Ukraine; another mobile care unit is en route to the Latvian border, the company said.
In his own note, the CEO of Starbucks said that “we condemn the horrific attacks in Ukraine by Russia and our hearts go out to all those affected.”
“We continue to see the tragic events unfold, and today we have decided to suspend all commercial activity in Russia, including the shipment of all Starbucks products,” Johnson added.
Many corporations have ceased operations in the country in protest of the invasion of Ukraine.
Among them is the consumer goods conglomerate Unilever, which on Tuesday said it has suspended all imports and exports of its products inside and outside Russia, and will not invest any more capital in the country.
Last week, New York State Comptroller Thomas DiNapoli, a trustee of the state pension fund, which is a McDonald’s investor, sent a letter to McDonald’s urging him to consider stop its operations in Russia.
“We believe that companies that continue to operate in Russia and invest in Russian assets face significant and growing legal, compliance, operational, human rights and personnel and reputation risks,” DiNapoli wrote.
In a White House speech, President Joe Biden vowed to hunt down the assets of the oligarchs, praised the Ukrainian resistance and condemned the Russian leader for not allowing the ceasefire for humanitarian aid.
“Putin seems determined to continue on his murderous path no matter the cost,” he said.
But as he tightened his grip on Moscow, Biden said Putin had miscalculated.
“It has already turned two million Ukrainians into refugees,” he said.
“Russia may continue to grind its advance at a horrible price, but that is clear: Ukraine will never be a victory for Putin.
“Putin may be able to take a city, but he will never be able to keep the country.
“And if we do not respond to Putin’s assault on global peace and stability today, the cost of freedom, and for the American people, will be even greater tomorrow.”