Russia-Ukraine crisis: Coca-Cola, PepsiCo suspend business in Russia
What's the story
The Coca-Cola Company and PepsiCo—two of the biggest beverage producers in the world—said on Tuesday that they are suspending their business in Russia in the wake of Moscow's invasion of Ukraine. While announcing the move, both the companies echoed concern for Ukraine as Russia intensifies its attacks on the neighboring country. Earlier, McDonald's and Starbucks had also curtailed operations in Russia.
Context
Why does this story matter?
PepsiCo and Coca-Cola became the latest high-profile Western consumer brands to halt operations in Russia after it launched a full-fledged invasion of Ukraine. This comes as numerous companies—from Apple to Visa—have already stopped or at least paused their operations in Russia. Meanwhile, financial sanctions imposed by the West on Russia have already frozen much of the country's central bank's $640 billion in assets.
Coca-Cola
'Our hearts are with people...': Coca-Cola
In a statement regarding the suspension of its business in Russia, Coca-Cola said, "Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine." "We will continue to monitor and assess the situation as circumstances evolve," the statement added. Notably, Russia and Ukraine contributed about 1% to 2% of Coca-Cola's net operating revenue in 2021.
PepsiCo
PepsiCo cites 'horrific' events in Ukraine to halt its business
PepsiCo—which operated in Russia for over 60 years—cited "the horrific events occurring in Ukraine" for suspending the sales of Pepsi-Cola, 7 Up, and other brands along with capital investments and all advertising and promotional activities in Russia. However, it is not halting all businesses in the country. The company said it would keep selling some essential products, like baby formula, milk, and baby food.
Quote
'We must stay true to our humanitarian aspect of business'
In a memo to PepsiCo employees, CEO Ramon Laguarta said, "As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business." Notably, Pepsi generates roughly 4% of its annual revenue from Russia.
Starbucks, McDonald's
Starbucks, McDonald's pull the plug in Russia
Meanwhile, Starbucks on Tuesday announced it was also suspending all business activities in Russia, including shipments of its products. Starbucks CEO Kevin Johnson had also condemned the attacks in a letter on Friday. The announcement came after McDonald's said it would temporarily close its 850 restaurants in Russia. Notably, about 84% of McDonald's Russian locations are owned by the company.
Development
The firms had received flak for continuing operations
Pepsi, Coca-Cola, McDonald's, and Starbucks had been drawing criticism for continuing to operate in Russia even as a broad range of American companies announced suspensions and paused businesses. Coca-Cola and McDonald's also faced boycott campaigns on social media. Notably, many US companies have tried to reduce their exposure in both Russia and Ukraine since Russia's invasion of Crimea back in 2014.