After Russia’s invasion of Ukraine, McDonald’s and other well-known American corporations are still raking in the cash — and the head of New York state’s pension system isn’t happy about it either.
As calls for boycotting other brands still doing business in Russia grow louder, hashtags such as #BoycottPepsi, #BoycottCocaCola, and #BoycottYumBrands are becoming popular on social media sites such as Twitter.
Companies conducting business in Russia face “significant and escalating legal, compliance, operational, human rights and personnel, and reputational risks,” according to New York State Comptroller Thomas DiNapoli, who is encouraging them to rethink their decision.
In his letter, DiNapoli, who is in charge of the state’s nearly $280 billion pension fund, which also holds stock in the firms, said that “Russia’s illegitimate invasion of Ukraine has resulted in unprecedented penalties on Russian companies and people.”
Because of the volatility of the situation and the probability that things may worsen, I feel it sensible to halt acquisitions in all Russian enterprises, despite the fact that American sanctions currently restrict investments in many Russian companies.
DiNapoli addressed a number of other corporations on Friday, in addition to McDonald’s:
- PepsiCo Inc. (Pepsi, Fritos, Quaker Oats)
- Cosmetics giant Estee Lauder (Bobbi Brown, Clinique)
- Snack food giant Mondelez International Inc. (Ritz crackers, Oreo cookies, Trident gum)
- Fortinet Inc. (cyber-security)
- Kimberly-Clark Corp. (Huggies, Depends)
- Bunge Ltd. (fertilizer, bio-fuel)
- Coty Inc. (Adidas, Gucci, Vera Wang)
- Alnylam Pharmaceuticals Inc.
- Technology company Trimble Inc.
Coca-Cola was not on DiNapoli’s mailing list, despite the fact that the company declared last week that it will donate more than $1 million to Red Cross programs to assist Ukrainian refugees in Poland and other countries while making no mention of its considerable commercial interests in Russia.
According to a statement from Coca-Cola, “everyone at Coca-Cola has been following the news from Ukraine with heavy hearts over the last few days.” “Our thoughts and prayers are with those who have been affected.”
The “unhinged, tyrannical foreign policy” of Russian President Vladimir Putin, according to DiNapoli, has already resulted in sanctions that have “hobbled Russia’s already weak economic growth.”
According to DiNapoli’s article, “Russia’s currency has plummeted in just a few days since sanctions were instituted.” “We will continue to keep an eye on these evolving events.” The people of Ukraine have the support of the people of New York. “We are hoping for a peaceful outcome,” said the group.
While the conflict in Ukraine continues, Newsagency reached out to firms such as McDonald’s and Coca-Cola for comment, as well as to discover if they intend to stop operations in Russia while the conflict continues. The majority of people did not respond.
Speaking in an emailed statement, Alnylam spokesperson Christine Lindenboom said that the corporation “stands with the Ukrainian people.”
Alnylam does not have operations in Russia, and the country accounts for just a very tiny, insignificant portion of product sales for the company’s life-saving drug for an ultra-rare genetic disorder that affects young patients, according to Lindenboom. These medications are exempt from sanctions, and we intend to continue to provide patients with access to these medications.
A Trimble spokeswoman, meanwhile, directed a Newsagency to a statement on the company’s website, which condemned the Russian invasion.
As of last week, the company announced that it will no longer be offering its goods and services in Russia and Belarus.
A number of other companies, including Apple and luxury retailers such as Hermès, have either paused sales, imposed restrictions or closed their Russian operations in response to the invasion of Ukraine.
Retailers such as H&M and entertainment behemoths such as Disney and Warner Bros. have also expressed concern, with the latter announcing last week that it was “pausing the release of its feature picture ‘The Batman’ in Russia.”
Starbucks’s top executive Kevin Johnson, the company’s CEO, stated in a letter to the company’s partners on Friday that the company has 130 stores in Russia but none in Ukraine.
Despite this, Starbucks, according to Johnson, opposes Russia’s “unprovoked, unfair, and terrible actions on the Ukrainian people.”
“First and foremost, whatever royalties we earn from our commercial activities in Russia will be donated to humanitarian assistance efforts in Ukraine,” Johnson stated in his letter.
As previously reported by Johnson, Starbucks has already made a contribution of $500,000 to “the World Central Kitchen and the Red Cross for humanitarian relief efforts in Ukraine.”
During the Soviet Union’s existence, McDonald’s built its first Russian fast-food restaurant 32 years ago, and the company today has 847 restaurants in Russia and 108 restaurants in Ukraine.
According to the firm, the locations contribute for 2 percent of all McDonald’s sales, about 9 percent of total revenue, and 3 percent of total operating income (profit).
This reluctance to speak publicly about the invasion, however, may be due to the fact that only 16 percent of McDonald’s restaurants in Russia are owned and operated by local Russians, while all of the company’s restaurants in Ukraine are run directly by the company.
A note to clients from Bank of America securities analyst Sara Senatore on Monday, which was obtained, stated that “in 2014, after Russia was hit with sanctions in response to its Crimea invasion, there was perceived negative reaction at the country level against American companies, including McDonald’s, whose Moscow restaurants it closed for sanitary violations.'”
YUM Brands, which owns KFC, Taco Bell, and Pizza Hut, has more than 1,000 stores in Russia, according to the company. YUM stated in a statement to CNBC that it was “shocked and saddened” by the horrific events happening in Ukraine. “Like so many others across the globe, we are concerned about the safety of our workers, franchisees, and partners in the area.”
At the same time, unlike McDonald’s, the majority of Yum Brands’ Russian outlets are franchises managed by local operators. As a result, the majority of the company’s revenue comes from licensing fees, and these restaurants account for just 2 percent of the company’s total sales revenue.