Iconic U.S. brands Coca-Cola, Pepsi and McDonald’s suspend business in Russia
An employee of Burger King restaurant, prepares an order with Coca-Cola in Moscow, Russia January 21, 2010.
Denis Sinyakov | Reuters
PepsiCo, Coca-Cola, McDonald’s and Starbucks each said Tuesday they are suspending business in Russia after that country’s invasion of Ukraine, a symbolic step-back by four iconic U.S. brands.
Pepsi’s cola has been sold in Russia for more than six decades. McDonald’s opened its restaurant in the Soviet Union in Moscow just months before the state collapsed. In recent days, all four companies have drawn criticism for continuing to operate in Russia while other U.S. companies backed out and paused sales.
Yale Professor Jeffrey Sonnenfeld compiled and made public a list of U.S. companies that have withdrawn from Russia following President Vladimir Putin’s invasion — and those that hadn’t. Until Tuesday afternoon, Coke was among the most recognizable names on the spreadsheet.
“Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,” Coke said in a brief statement Tuesday afternoon. “We will continue to monitor and assess the situation as circumstances evolve.”
Russia represents one of the few regions worldwide where Coke’s rival PepsiCo has a larger presence. In a regulatory filing, Coke said its business in Ukraine and Russia contributed about 1% to 2% of its consolidated net operating revenue and operating income in 2021.
Pepsi, on the other hand, generates roughly 4% of its annual revenue in Russia and is not halting all of its Russian business. The company said it will keep selling some essential products, like baby formula, milk and baby food in the country.
The company will suspend Russian sales of its Pepsi-Cola, 7Up and Mirinda brands, along with capital investments and all advertising and promotional activities.
“As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business,” PepsiCo CEO Ramon Laguarta wrote in a memo to employees viewed by CNBC.
McDonald’s announced Tuesday all 850 of its Russian restaurants would temporarily close. Starbucks went a step further, saying all Russian business activity is suspended, including shipment of its products. Of the two restaurant companies, McDonald’s has a larger presence in the country and receives a higher percentage of its global revenue from those sales.
Since the Russian invasion of Crimea in 2014, many U.S. companies have looked to reduce their exposure in both Russia and Ukraine. Some restaurant chains, like McDonald’s, have sold off some of their company-owned locations to local franchisees.
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