No Big Mac? Pressure rises against companies that remain in Russia

While many US multinationals – from tech giant Apple to Levi’s jeans – have decided to suspend their services in Russia, some companies remain in the country despite risks to their reputations.

But they are facing mounting pressure: hashtags like #BoycottMcDonalds and #BoycottPepsi are circling social media, two companies that have also received letters from the head of New York state pension funds.

These companies “need to question whether doing business in Russia is worth the risk in this extraordinarily volatile period,” Thomas DiNapoli, who also sent letters to brokerage house Bunge, biscuit maker Mondelez, cosmetics groups, said in a statement. Estée Lauder and Coty, and the maker of hygiene products Kimberly-Clark.

A Yale University team that maintains a list of companies with a significant presence in Russia said some 230 have announced their withdrawal from the country since the Ukraine invasion.

Many American companies are silent. Brands such as McDonald’s, Bunge, Mondelez, Estée Lauder and Coty, and Kimberly-Clark did not respond to AFP requests for information.

legitimate reasons

Yum! Brands notes that its more than 1,000 KFC restaurants and 50 Pizza Hut locations are nearly all independently owned and operated under license or franchise.

On its side, Starbucks argues that its nearly 130 cafes in Russia belong to a Kuwaiti conglomerate, and has pledged to return any contribution from its activity in the country to humanitarian efforts in Ukraine.

Certain groups may have legitimate reasons to stay, pointed out several experts in ethics and communication strategy, consulted by AFP.

“There are serious risks to Westerners currently in Russia, and these companies must do everything they can to repatriate their people,” says Richard Painter, a University of Minnesota professor and former White House ethics lawyer.

Some companies may be hesitant because they think they can play an intermediary role between the parties or because they produce essential products, said Tim Fort, a professor of business ethics at Indiana University.

However, he added, “it is certainly a good time to choose a side and it does not seem like a very difficult time to do so” in view of the allegations of human rights violations committed by Russia.

No Big Mac

The decision of a single company “is not going to tip the balance, but there is a cumulative effect,” Fort said.

And a company as well known as McDonald’s can have real influence in Russia at a time when the official discourse minimizes the magnitude of the conflict and the population has little access to information outside the official.

“The Russians will be able to survive without the Big Mac, but they will wonder why McDonald’s closes, they will wonder what is really going on,” weighed the expert.

While Painter said that companies should think about emphasizing the message that “Russia cannot start a war in Ukraine and continue to participate in the world economy.”

For Mark Hass, a communication specialist at Arizona State University, the economic interests of companies that have so far chosen not to leave Russia “will probably continue to outweigh reputational risks.”

McDonald’s, for example, earns 9% of its sales and 3% of its operating profits in the country.

But “if social networks start to identify you as the company willing to do business with an autocratic aggressor who is killing thousands of people in Ukraine, then the problem takes another turn and can affect your business far beyond Russia,” he said. Hass.