Starbucks & McDonalds halt operations in Russia

Starbucks Coffee announced it is suspending operations of its stores in Russia. McDonald’s Corporation, The Coca-Cola Company, which owns Costa Coffee, and PepsiCo, are also temporarily closing locations or stopping the sale of products in Russia due to the country’s invasion of Ukraine, according to The New York Times.

The Seattle, Washington-based coffee chain is also halting shipment of all Starbucks products to the country in response to its invasion of Ukraine. Starbucks opened its first Russian location in 2014. Currently, there are 130 Starbucks stores in the country, all of which are operated by Kuwait-based Alshaya Group.

McDonald’s first opened its doors in Moscow’s Pushkin Square in 1990 and now operates more than 800 stores in the country. “In the 30-plus years that McDonald’s has operated in Russia, we’ve become an essential part of the 850 communities in which we operate,” Chris Kempczinski, the Chicago, Illinois-based company’s chief executive, said in the NYTimes article. He noted that the company employed 62,000 people in the country.

In response to mounting pressure from investors and social media users, some of the largest US food and beverage companies and quick serve restaurant chains are taking a stance. However, “for food companies that have spent decades cultivating the Russian market, the act of pausing or ceasing operations in the country is complex. It involves unwinding often byzantine local supply and manufacturing chains, addressing the fates of tens of thousands of Russian employees, and untangling close ties with Russian banks, investors and others that allowed them to flourish all these years,” writes Julie Creswell in the NYTimes piece.

Although, PepsiCo, whose products have been available in Russia since the early 1970s, said it would no longer sell Pepsi and 7-Up there, it would continue to produce dairy and baby food products in the country as a ‘humanitarian’ effort and to keep tens of thousands manufacturing and farm workers employed.

For the full NYTimes article, click here.

Related content

One response to “Starbucks & McDonalds halt operations in Russia”

  1. mehaak says:

    This article highlights the significant impact of Russia’s invasion of Ukraine on major corporations like Starbucks, McDonald’s, and PepsiCo. It underscores the complexities involved in pausing or ceasing operations in the Russian market, including supply chain logistics and employee considerations. The decisions made by these companies reflect their commitment to taking a stance in response to global events. It’s a reminder of the far-reaching consequences of geopolitical conflicts on businesses and their operations. 🌍🛑 #RussiaUkraineConflict #CorporateResponsibility

Leave a reply

Tea & Coffee Trade Journal