Starbucks follows the mass exodus of corporate American food companies, which are putting economic pressure on Russia to withdraw from the country.
The Seattle coffee company will retire after shutting down 130 of its cafes in March. This will mean the loss of nearly 2,000 jobs at the Kuwaiti-based franchise operator Alshaya Group. It will continue to pay workers for the next six months.
“As we mentioned on March 8, we have stopped all business in Russia, including the delivery of all Starbucks products,” the company said in a statement. “Starbucks has decided to go out and the brand no longer has a presence on the market.”
MacDonald’s, Pepsi and Cocoa-Cola have announced they will sell their operations in Russia. Fast food companies Pizza Hut, KFC and Taco Bell have ceased operations in the country.
Starbucks’ decision to close in Russia is different from the approach taken by some other foreign companies.
Seattle-based Starbucks has 130 stores in Russia run by licensee Alshaya Group, with nearly 2,000 employees in the country.
Starbucks withdraws from Russia without retaining its ability to return, unlike many other corporations boycotting the former Soviet country
Last week, McDonald’s announced it was selling its restaurants in Russia to local licensee Alexander Govor to be rebranded under a new name, but will retain its trademarks while France’s Renault sells its majority stake in Russia’s largest carmaker with the option to buy back quantity
Many other Western companies, including Imperial Brands and Shell, have severed ties with the Russian market by agreeing to sell their assets in the country or hand them over to local managers.
The coffee company does not keep the return options.
Companies that stopped doing business in Russia
- Mac Donalds
- KFC
- So Bel
- Pizza Hut
- Cocoa-Cola
- Pepsi
- Starbucks
- Uniqlo
- British American Tobacco
- Ikea
- H&M
- Canadian goose
- Nestle
- Nike
- TJ Max
- Unilever
- BP
- Exxon Mobile
- Shell
- Volvo
- Siemens
- Renault
- Caterpillar
- Delta Air Lines
- United Airlines
- DHL
- Hilton hotels
- Hotels in Hyatt
- american airlines
- Uber
- Sony
- Microsoft
- Apple
- Netflix
- Bloomberg
- Walt Disney
- Warner Brothers
- Imperial brands
In March, Starbucks closed its stores and shut down all business in Russia, including the delivery of its products to the country, following Moscow’s invasion of Ukraine.
Starbucks did not provide details on the financial impact of the exit. McDonald’s said it would take a substantially non-monetary fee of up to $ 1.4 billion.
CEO Kevin Johnson said in March that he “condemns the horrific attacks on Ukraine by Russia and that our hearts are all affected.”
From the beginning, it was a difficult sleigh in Russia for the caffeine supplier.
Initially, they failed to enter the market because Sergei A. Zuikov, a brand squatter, had intellectual property rights over their name. The Russian lawyer offered to sell their name back for $ 600,000, but the company refused. In 2005, Starbucks eventually won the name back in a civil lawsuit.
The company opened its first store in the Mega Khimki shopping center in September 2007, followed three months later by a second branch in the Arbat district.
Starbucks banned smoking in all of its Russian stores in 2011, three years before smoking was banned in public places in the rest of the country.
Although the company was not an official sponsor of the 2014 Olympics in Sochi, Russia, there was a secret coffee pavilion set up for NBC television operators, according to the Wall Street Journal.
In a statement to DailyMail.com on Tuesday, Yum Brands said it was halting all investment and development of new restaurants in Russia and would donate all profits from operations in Russia to humanitarian efforts.
“Like so many people 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 opposed calls to close restaurants in Russia, which include about 1,000 KFC seats and 50 Pizza Huts.
Most of these sites are managed through franchising or licensing agreements, which can complicate the company’s ability to close them.
Coca-Cola said its business in Russia and Ukraine contributed about 1 to 2 percent of the company’s net operating income in 2021.
“Our hearts are with the people who are suffering the unconscious consequences of these tragic events in Ukraine,” the company said. “We will continue to monitor and assess the situation with the development of circumstances.”
The Starbucks logo, seen on the first Starbucks to be found in Russia, in the Pushkino shopping park near Moscow. The chain closes all places in Russia indefinitely
Pepsi has two manufacturing plants in Russia and sells snacks and beverages in the country, according to the latest annual report for 2021.
PepsiCo, whose carbonated beverages were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily essentials, such as milk and other dairy products, baby formula and baby food, in Russia.
“As many of you know, we have been working in Russia for more than 60 years and have a place in many Russian homes,” said PepsiCo CEO Ramon Laguarta in a note to global officials.
“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.
Coca-Cola, which operates 10 bottling plants in Russia through a licensed partner, said in a statement that it was shutting down all business there. Pictured: Factory in Samara, Russia
McDonald’s, such as Moscow and Russia and Ukraine, account for 9 percent of McDonald’s annual revenue. Now they are closing
Laguarta said PepsiCo is also halting capital investment and all advertising and promotional activities in Russia.
Pepsi has two manufacturing plants in Russia and sells snacks and beverages in the country, according to the latest annual report for 2021.
PepsiCo, whose carbonated beverages were one of the few Western products allowed in the Soviet Union before its collapse, said it would continue to sell daily essentials, such as milk and other dairy products, baby formula and baby food, in Russia.
A billboard for Pepsi stands above a sign for a McDonald’s restaurant in Moscow in a photo file. Both brands have suspended sales and operations in Russia indefinitely
People eat in front of a McDonald’s fast food restaurant in Moscow in October 2021, but the giant’s 850 Russian restaurants are already closed due to Putin’s invasion of Ukraine
“As many of you know, we have been working in Russia for more than 60 years and have a place in many Russian homes,” said PepsiCo CEO Ramon Laguarta in a note to global officials.
“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 is also halting capital investment and all advertising and promotional activities in Russia.
He also parked a Ronald McDonald House Charities mobile medical center on the Polish border with Ukraine; another mobile care unit is on its way to the Latvian border, the company said.
In his own note, the CEO of Starbucks said that “we condemn the horrific attacks on Ukraine by Russia and our hearts are on everyone affected.”
“We continue to monitor the unfolding of the tragic events and today we decided to stop all business in Russia, including the delivery of all Starbucks products,” added Johnson.
Many corporations have shut down in the country in protest of the invasion of Ukraine.
Revenues generated by McDonald’s in Russia and Ukraine amount to more than $ 2 billion a year for the chain
Among them is the consumer goods conglomerate Unilever, which said on Tuesday that it had stopped all imports and exports of its products inside and outside Russia and would not invest more capital in the country.
Last week, New York State Comptroller Thomas DiNapoli, a trustee of the state pension fund that is an investor in McDonald’s, sent a letter to McDonald’s urging it to consider suspending operations in Russia.
“We believe that companies that continue to operate in Russia and invest in Russian assets face significant and growing legal risks, compliance risks, operational, human rights and staff and reputation risks,” DiNapoli wrote.
In a White House speech, President Joe Biden vowed to pursue oligarchs’ assets, praised Ukrainian resistance and condemned the Russian leader for not allowing a ceasefire for humanitarian aid.
“Putin seems determined to continue on his murderous path, no matter the cost,” he said.
But as he tightened Moscow’s economic trap, Biden said Putin was wrong.
“He has already turned two million Ukrainians into refugees,” he said.
“Russia can continue to squander its progress at a terrible cost, but it is already clear: Ukraine will never be a victory for Putin.
“Putin may be able to take over the city, but he will never be able to hold the country.
“And if we do not respond to Putin’s attack on global peace and stability today, the cost of freedom and the American people will be even greater tomorrow.”
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