'Horrific events' force top brands to pull plug on Russia

Major global brands Unilever, Procter & Gamble, McDonald’s, Coca-Cola, PepsiCo, Starbucks, Mothercare and Heineken have joined the growing list of firms halting business in Russia due to the invasion of Ukraine.

The move follows increasing pressure to boycott Russia from shareholders, consumers and politicians, as the fall-out from the war in Ukraine spreads worldwide.

McDonald’s opened its first outlet in Moscow in 1990, in a move which was seen as a major milestone in Russian president Mikhail Gorbachev’s plan to reform the Soviet Union. McDonald’s said it was temporarily closing its 850 restaurants in Russia, while Starbucks also said its 100 coffee shops would shut.

McDonald’s chief executive Chris Kempczinski said it was “impossible to predict” when it would reopen in Russia.

P&G has suspended its Russian operations, including the removal of all advertising, media and promotional activity from the region; it has also discontinued all new capital investments in Russia. Unilever has followed suit, suspending all importing and exporting of its products into and out of Russia. It has also ceased all media and advertising spending within the country.

Meanwhile, Coca-Cola and Heineken has also confirmed they have stopped production and sales in Russia, while Mothercare said all business in Russia, which represents 20% to 25% of its global sales, had been suspended.

Other major global brands joining the mass exodus include the world’s largest music company, Universal Music Group, L’Oreal, Ikea, H&M, Burberry, Nike, Net-a-Porter, Boohoo, Asos and Apple.

PepsiCo, which has a much larger presence in Russia than Coca-Cola, said it was halting the production and sale of Pepsi and other global brands in Russia and suspending capital investments and advertising, citing “horrific events” in Ukraine.

However, it said it would continue to offer other products. Chief executive Ramon Laguarta said: “As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business.

“That means we have a responsibility to continue to offer our other products in Russia, including daily essentials such as milk and other dairy offerings, baby formula and baby food.”

Burger King is also currently keeping its Russian outlets open. It pledged $3m (£2.3m) to support Ukrainian refugees and said people fleeing to European nations could get free Whopper meal vouchers.

Parent company Restaurant Brands International has insisted it will redirect its profits from more than 800 franchised operations in Russia to humanitarian efforts.

Amati Global Investors fund manager Anna MacDonald told the BBC Radio 4 Today Programme that firms who were joining the Russian exodus were doing so because “shareholders and wider stakeholders wouldn’t stand for continued generation of revenues and profits” from the country, adding that “it was affecting their share prices and the feeling was that it was just utterly inappropriate to continue to do so”.