McDonald’s and other well-known U.S. companies are still raking in the rubles even after Russia invaded Ukraine — and New York state’s pension fund chief is not lovin’ it.
As Americans are calling for boycotting Russian brands, more Americans are joining the chorus. Twitter is abuzz with hashtags such as #BoycottPepsi and #BoycottCocaCola.
Thomas DiNapoli, New York’s state Comptroller, is asking companies to reconsider doing business with Russia, because of “significant and growing legal and compliance, operational, personnel, human rights, and reputational risk.”
“Russia’s illegal invasion of Ukraine has resulted in unprecedented sanctions against Russian businesses and individuals,” wrote DiNapoli. He oversees the $280 billion state pension fund which also owns shares in the companies.
“While American sanctions have already prohibited investments in many Russian businesses, I believe it prudent to freeze all Russian company purchases due to the unpredictability of the situation and the possibility that the conditions will worsen.”
The other companies DiNapoli mentioned on Friday were:
PepsiCoInc. (Pepsi, Fritos, Quaker Oats)
Cosmetics giant Estee Lader ( 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. Last week, Coca-Cola announcedit would donate more than $1million to Red Cross operations to assist Ukrainian refugees in Poland. However, it did not mention its extensive Russian business operations.
The statement said that Coca-Cola employees have been following news from Ukraine for the past few days with heavy hearts. “Our thoughts and prayers are with the victims.”
DiNapoli stated that Russian President Vladimir Putin’s “unhinged and tyrannical” foreign policy has already led to sanctions that have “hobbled Russia’s already weak economic growth.”
DiNapoli wrote that Russia’s currency had plummeted within days of sanctions being imposed. We will continue to monitor the changing events. New York stands by the Ukrainian people. We wish for a peaceful solution.”
NBC News reached out at McDonald’s and Coca-Cola to get their comments and find out if they would suspend operations in Russia during the conflict in Ukraine. The majority of companies did not respond.
Christine Lindenboom, spokesperson for Alnylam, stated that the company stands with the people of Ukraine in an email response.
Lindenboom stated that Alnylam has no operations in Russia, and that Russia only accounts for a small percentage of the product sales for our life-saving medicine to treat a rare genetic condition affecting pediatric patients. These medicines are exempted from sanctions, and we intend to continue providing patients access.”
NBC News was directed by a Trimble spokesperson to publish a statement condemning the Russian invasion on its website.
It stated that it had stopped selling its products and services in Russia, Belarus and Russia “as of last week”.
In response to the invasion in Ukraine, other companies such as Apple and luxury retailers like Hermes either stopped selling or imposed restrictions on Russian sales.
H&M, entertainment giants such as Disney and Warner Bros. have also been affected. Last week, H&M announced that it was ” halting the release of its feature film ‘The Batman’.
Starbucks CEO Kevin Johnson stated in a letter Friday to his partners that there are 130 Russian shops and none in Ukraine.
Johnson said that Starbucks condemned the “unprovoked and unjust” attacks by Russia on Ukraine.
Johnson wrote that “first, we will donate any royalty we receive from business operations in Russia for humanitarian relief efforts to Ukraine.”
Johnson stated that Starbucks had already donated $500,000 to the “World Central Kitchen” and the Red Cross for humanitarian relief efforts in Ukraine.
McDonald’s first Russian fast-food outlet opened 32 years ago, when the Soviet Union was still in existence. Today, there are 847 outlets in Russia and 108 across Ukraine.
According to the company , these restaurants account for 2 % of McDonald’s’s sales and about 9 % of its revenue. They also contribute 3 % of McDonald’s operating income,.
The reason the fast-food chain is reluctant to talk publicly about the invasion could be that only 16 percent of Russian restaurants are owned and operated directly by Russians, and all the restaurants in Ukraine are managed by the company.
“In 2014 after Russia was hit by sanctions in response to the Crimea invasion, there was an perceived negative reaction at country level against American businesses, including McDonald’s, whose Moscow outlets it closed for’sanitary violations.'” Sara Senatore, a Bank of America Securities Analyst, wrote Monday in a note to clients. This was obtained from CNBC.
Yum Brands has over 1,000 restaurants in Russia. Its chains include KFC and Taco Bell. Yum stated that, “Like many people around the globe, we are shocked by the tragic events occurring in Ukraine and we are focused on the safety and security of our employees and franchisees.”
Yum Brands’ Russian franchises are run by local operators. This means that the majority of Yum Brands’ sales comes from licensing fees.
