From Apple to Levi’s jeans, many American multinationals have decided to suspend their activities in Russia. But a few companies still choose to stay in the country despite the risks to their reputation.
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On social networks appeared the keywords #BoycottMcDonalds or #BoycottPepsi.
The American fast food chain McDonald’s also announced on Tuesday that it had decided to temporarily close its 850 restaurants in Russia and to suspend all its operations in the country, thus following in the footsteps of many multinationals which have decided to distance themselves from Moscow.
The group will continue to pay its 62,000 employees in the country, said in a message the general manager of the company, Chris Kempczinski.
McDonald’s had become a symbol in the United States of the big companies that have so far chosen not to leave Russia, almost two weeks following the invasion of Ukraine.
“The situation is extraordinarily difficult for a global brand like ours and there are many considerations to take into account,” said Mr. Kempczinski in his message, referring to employees, but also suppliers and customers.
Russia, where McDonald’s directly manages more than 80% of the restaurants bearing its name, represents 9% of the group’s turnover and 3% of its operating profit.
“At the same time, respecting our values means that we cannot ignore the unnecessary human suffering taking place in Ukraine,” he added.
McDonald’s “will continue to assess the situation and determine if further action is necessary,” the official said.
It is currently “impossible to predict” when the restaurants will be able to reopen, also indicated Mr. Kempczinski: in addition to the humanitarian situation, the group must manage disruptions in its supply chain and other operational problems.
The head of the New York State pension fund sent letters to the bosses of these multinationals as well as to the manufacturer of biscuits Mondelez, the cosmetics groups Estée Lauder and Coty, or even the brokerage house Bunge.
These companies “must ask themselves if doing business in Russia is worth the risk in this extraordinarily volatile period”, he justifies.
A team from Yale University maintains a list of companies that still have a significant presence in Russia. It highlights the role played by the voluntary departure of 200 large groups from South Africa in the 1980s in the fall of apartheid.
Many American companies still in Russia remain silent, like Bunge, Mondelez, Kimberly-Clark and Coty, which did not respond to a request from AFP.
Starbucks argues that its approximately 130 cafes in Russia are owned by a Kuwaiti conglomerate and Yum! Brands points out that its roughly 1,000 KFC restaurants and 50 Pizza Hut locations are nearly all independently owned.
Photo AFP
Sign that the pressure is working, Yum! Brands nevertheless announced Monday evening the suspension of all its investments in the country while Estée Lauder also announced late Monday the closure of all its stores.
Some groups may have legitimate reasons to stay, note several ethics and communication experts interviewed by AFP.
“There are serious risks once morest Westerners currently in Russia and these companies must do everything they can to repatriate these people,” said Richard Painter, professor at the University of Minnesota and former lawyer responsible for the ethics in the White House.
Some companies may be hesitant because they think they can play a role of intermediary between the parties or because they produce essential products such as pharmaceutical ingredients in the country, notes Tim Fort, professor of business ethics at the Indiana University.
However, he adds, “this is probably a good time to choose a side and it does not seem very difficult to me to do so”.
The decision of a single company “is not going to tip the scales, but there is an accumulation effect,” says Mr. Fort.
And a company as well known as McDonald’s can have a real influence in Russia at a time when the population has almost no access to anything but official discourse, which minimizes the extent of the conflict.
“Russians will be able to survive without Big Macs, but they will mostly wonder why McDonald’s is closing, wonder what’s really going on,” says the expert.
For Mr. Painter, companies must think regarding the message to convey, namely that “Russia cannot start a war in Ukraine while participating in the global economy”.
With the severe economic sanctions imposed with a broad consensus by Western governments, “this is the best way to deal with Russia”, he asserts, judging that the risk of the use of nuclear weapons within the framework of an armed conflict would be too great.
Perhaps some groups are betting that criticism will rain down in the short term before it subsides, suggests Brian Berkey, a specialist in business ethics at the University of Pennsylvania.
Other crisis situations, such as the Israeli-Palestinian conflict, have already given rise to calls for a boycott without necessarily having much effect.
Support for this kind of initiative is not always unanimous, however, while “the vast majority of the population in European countries or in the United States agree that what Russia is doing is clearly unacceptable”, remarks Mr. Berkey.
For Mark Hass, a communications specialist at Arizona State University, the economic interests of companies that have so far chosen not to leave Russia “arguably still outweigh the reputational risks.” .
McDonald’s, for example, derives 9% of its turnover and 3% of its operating profits from the country.
But “if social media starts to identify you as the company willing to do business with an autocratic abuser who is killing thousands of people in Ukraine, then the problem takes on another dimension and can affect your business far beyond the Russia,” says Hass.
