Fast-food giants McDonald's and PepsiCo face calls to end operations in Russia

Fast food giants McDonald’s and PepsiCo are facing calls to cut business ties with Russia in response to the invasion of Ukraine.

Insider reported that Thomas DiNapoli, the New York state comptroller, urged American companies to rethink their preexisting business relationships with Russia because they face “significant and growing legal, compliance, operational, human rights and personnel, and reputational risks.”

DiNapoli added that suspending or ending business in Russia “would address various investment risks associated with the Russian market” and will play a crucial role in “condemning Russia’s role in fundamentally undermining the international order.”

McDonald’s and PepsiCo are just the latest in a long line of Western companies with international operations to consider severing their business relationships with the Russian market.

Last week, Disney announced that it would be halting all theatrical film releases in Russia in response to the Russian invasion of Ukraine.

Disney issued a statement that said, “Given the unprovoked invasion of Ukraine and the tragic humanitarian crisis, we are pausing the release of theatrical films in Russia, including ‘Turning Red’ from Pixar. We will make future business decisions based on the evolving situation. In the meantime, given the scale of the emerging refugee crisis, we are working with our NGO partners to provide urgent aid and other humanitarian assistance to refugees.”

Similarly, the British Petroleum Company (BP) announced that it would be liquidating its holdings and ending its relationship with the Russian state-owned energy company Rosneft.

Helge Lund, the chairman for BP, said, “Russia’s attack on Ukraine is an act of aggression which is having a tragic consequence across the region. BP has operated in Russia for over 30 years, working with brilliant Russian colleagues. However, this military action represents a fundamental change.”

Financial sector giants Visa and Mastercard are also cutting ties with Russia in accordance with Western sanctions.

The credit card companies are suspending operations in Russia and once its ban is in place, credit cards issued in Russia will not work abroad and cards issued to people outside of Russia will not work within Russia’s borders.

McDonald’s is known for its cosmopolitan franchising strategy. There are McDonald’s restaurants in over 100 countries. The company has been able to achieve success in Russia by using Russian grown ingredients and catering to the tastes and whims of the Russian people it served.

PepsiCo, who owns the Pepsi line of soda, has been prominent in Russia since the late-1950s when President Richard Nixon and Soviet Premiere Nikita Khrushchev were photographed drinking Pepsi Cola together.