McDonald’s and other well-known U.S. companies are still raking within the rubles even after Russia invaded Ukraine — and ny state’s pension fund chief isn’t 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 businesses .
“While American sanctions already prohibit investments in many Russian companies, i think it’s prudent to freeze purchases altogether Russian companies thanks to the situation’s unpredictability and therefore the likelihood that conditions will deteriorate.”
In addition to McDonald’s, the opposite 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 list was Coca-Cola, which last week announced it had been donating quite $1 million to Red Cross operations to assist Ukrainian refugees in Poland and other countries, but made no mention of its extensive business operations in Russia.
“Over the previous couple of days, everybody at Coca-Cola has been following the news from Ukraine with heavy hearts,” the corporate said within 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 process .”
“Russia’s currency has plummeted in only days since sanctions are instituted,” DiNapoli wrote. “We will still monitor these changing events. ny stands with the Ukrainian people. We hope for a peaceful resolution.”
McDonald’s and Coca-Cola are among the businesses NBC News reached bent for comment and to find out if they decide to suspend operations in Russia while the war in Ukraine goes on. There was no immediate reply.
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 had been “pausing the discharge of its feature ‘The Batman’ in Russia.”
Starbucks honcho Kevin Johnson said during a letter Friday to the company’s partners that they need 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’ll 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 therefore 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 had been the Soviet Union and now has 847 eateries in Russia and 108 in Ukraine.
Those restaurants account for two of McDonald’s sales, about 9% of its revenue, and three of its operating income, consistent with the corporate .
But the fast-food chain’s reluctance to talk publicly on the invasion may stem from the very fact that just 16% of the restaurants in Russia are franchises owned and operated by local Russians and every one of the restaurants in Ukraine are run directly by the corporate .
“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 financial analyst Sara Senatore wrote during a note to clients Monday that was obtained by CNBC.
Yum Brands, whose chains include KFC, Taco Bell and Pizza Hut, has quite 1,000 restaurants in Russia. “Like numerous across the planet , we are shocked and saddened by the tragic events unfolding in Ukraine, and we’re focused on the security of our employees, franchisees and partners within the region,” Yum said during a statement to CNBC.
Unlike McDonald’s, most of Yum Brands’ Russian stores are franchises travel by local operators, therefore the money Yum makes is from licensing fees, and these restaurants account for just 2% of the company’s sales.