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McDonald's and other U.S. brands under pressure to stop doing business in Russia

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Russia-Ukraine Conflict


MCDONALD'S AND OTHER U.S. BRANDS UNDER PRESSURE TO STOP DOING BUSINESS IN RUSSIA

"I believe it is prudent to freeze purchases in all Russian companies," New York
state Comptroller Thomas DiNapoli wrote.

The Kremlin is reflected in a window of a McDonald's restaurant in 2014.Maxim
Zmeyev / Reuters
Link copied
March 7, 2022, 8:20 PM UTC
By Corky Siemaszko

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.

Neither are many other Americans as calls get louder for boycotting other brands
still operating in Russia, and hashtags like #BoycottPepsi, #BoycottCocaCola and
#BoycottYumBrands are trending on Twitter.




New York state Comptroller Thomas DiNapoli is urging companies to reconsider
doing business in Russia because they face “significant and growing legal,
compliance, operational, human rights and personnel, and reputational risks.”

“Russia’s unlawful invasion of Ukraine has led to unprecedented sanctions
against Russian companies and individuals,” wrote DiNapoli, who oversees the
state’s roughly $280 billion pension fund, which also owns shares of the
companies.

“While American sanctions already prohibit investments in many Russian
companies, I believe it is prudent to freeze purchases in all Russian companies
due to the situation’s unpredictability and the likelihood that conditions will
deteriorate."


U.S. BUSINESSES DONATE MONEY AND MEDICAL SUPPLIES TO UKRAINE

March 5, 202202:38


In addition to McDonald's, the other companies DiNapoli addressed on Friday
included:


 * PepsiCo Inc. (Pepsi, Fritos, Quaker Oats)
 * Cosmetics giant Estee Lauder (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.

Not on DiNapoli's mailing list was Coca-Cola, which last week announced it was
donating more than $1 million to Red Cross operations to help Ukrainian refugees
in Poland and other countries, but made no mention of its extensive business
operations in Russia.

"Over the last few days, everybody at Coca-Cola has been following the news from
Ukraine with heavy hearts," the company said in the statement. "Our thoughts are
with those affected."

DiNapoli said Russian President Vladimir Putin's "unhinged, tyrannical foreign
policy" has already resulted in sanctions that have "hobbled Russia’s already
weak economic growth."



"Russia’s currency has plummeted in just days since sanctions have been
instituted," DiNapoli wrote. "We will continue to monitor these changing events.
New York stands with the Ukrainian people. We hope for a peaceful resolution.”

McDonald’s and Coca-Cola are among the companies NBC News reached out to for
comment and to learn if they plan to suspend operations in Russia while the war
in Ukraine is going on. Most did not reply.

In an emailed response, Alnylam spokeswoman Christine  Lindenboom said the
company "stands with the people of Ukraine."

"Alnylam does not have operations in Russia and only a very small, immaterial
amount of product sales for our life-saving medicine for an ultra-rare genetic
condition afflicting pediatric patients come from Russia," Lindenboom said.
"These medicines are exempt from sanctions and we plan to continue to provide
patients access."



Meanwhile, a Trimble spokeswoman directed NBC News to a statement on its website
condemning the Russian invasion.

"As of last week, we ceased selling our products and services in Russia and
Belarus," it said.




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Russia-Ukraine Conflict


RUSSIA-UKRAINE CONFLICTDOW DROPS NEARLY 800 POINTS AS MARKET TURMOIL CONTINUES

Other companies like Apple and luxury retailers like Hermès have either paused
sales, imposed restrictions or closed stores in Russia in response to the
invasion of Ukraine.

So have retailers like H&M and entertainment giants like Disney and Warner
Bros., which last week announced it was "pausing the release of its feature film
'The Batman' in Russia."



Starbucks honcho Kevin Johnson said in a letter Friday to the company's partners
that they have 130 shops in Russia but none in Ukraine.

Still, Johnson wrote, Starbucks condemns the "unprovoked, unjust and horrific
attacks on Ukraine by Russia."

"First, we will donate any royalties we receive from our business operations in
Russia to humanitarian relief efforts for Ukraine," Johnson wrote. 

Starbucks has also already contributed $500,000 to the "World Central Kitchen
and the Red Cross for humanitarian relief efforts for Ukraine," Johnson wrote.



McDonald’s opened its first fast-food restaurant in Russia some 32 years ago
when it was the Soviet Union and now has 847 eateries in Russia and 108 in
Ukraine.

Those restaurants account for 2 percent of McDonald's sales, about 9 percent of
its revenue, and 3 percent of its operating income, according to the company.

But the fast-food chain's reluctance to speak publicly on the invasion may stem
from the fact that just 16 percent of the restaurants in Russia are franchises
owned and operated by local Russians and all of the restaurants in Ukraine are
run directly by the company.

“In 2014, after Russia was hit with sanctions in response to its Crimea
invasion, there was a perceived negative reaction at the country level against
American companies, including McDonald’s whose Moscow restaurants it closed for
‘sanitary violations,’” Bank of America securities analyst Sara Senatore wrote
in a note to clients Monday that was obtained by CNBC.



Yum Brands, whose chains include KFC, Taco Bell and Pizza Hut, has more than
1,000 restaurants in Russia. “Like so many across the world, we are shocked and
saddened by the tragic events unfolding in Ukraine, and we’re focused on the
safety of our employees, franchisees and partners in the region,” Yum said in a
statement to CNBC.

Unlike McDonald's, most of Yum Brands' Russian stores are franchises run by
local operators, so the money Yum makes is from licensing fees, and these
restaurants account for just 2 percent of the company's sales.

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Corky Siemaszko

Corky Siemaszko is a senior writer for NBC News Digital.



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