American mega-corporations cave into pressure to suspend Russian operations

Maxim Zmeyev/Reuters

Let’s be honest, nearly all boycott threats are just that - ‘threats’ that most have no real intention of carrying out. Still, the mere threat of a boycott will usually suffice to pressure governments, corporations, and individuals into compliance with prevailing sentiment. But it took nearly two weeks of receiving intense criticism and two weeks of watching the ongoing carnage in Ukraine to drag, kicking and screaming, major American conglomerates Coca-Cola, Pepsi, McDonald’s, and Starbucks into temporarily suspending (key words) most of their operations in Russia. Lord forbid we ever prevent a Big Mac or a Frappuccino from ever been sold at any given time or place. - 

PepsiCo, Coca-Cola, McDonald’s and Starbucks each said Tuesday they are suspending business in Russia after that country’s invasion of Ukraine, a symbolic move by four iconic U.S. brands. 

Pepsi has sold it products in Russia for more than six decades, even when the company had to trade its soda concentrate for Stolichnaya vodka and warships. McDonald’s opened its first location beyond the Iron Curtain in Moscow, just months before the Soviet Union collapsed. 

In recent days, Pepsi, Coke, McDonald’s and Starbucks have drawn criticism for continuing to operate in Russia while other U.S. companies announced suspensions and paused sales. 

Yale Professor Jeffrey Sonnenfeld compiled and made public a list of U.S. companies that have withdrawn from Russia following President Vladimir Putin’s invasion — and those that hadn’t. Until Tuesday afternoon, Coke was among the most recognizable names on the spreadsheet. 

“Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,” Coke said in a brief statement Tuesday afternoon. “We will continue to monitor and assess the situation as circumstances evolve.” 

Russia represents one of the few regions worldwide where Coke’s rival PepsiCo has a larger presence. In a regulatory filing, Coke said its business in Ukraine and Russia contributed about 1% to 2% of its consolidated net operating revenue and operating income in 2021. 

Pepsi, on the other hand, generates roughly 4% of its annual revenue in Russia, though it is not halting all business in the country. The company said it will keep selling some essential products, like baby formula, milk and baby food. 

It said it will suspend Russian sales of its Pepsi-Cola, 7UP and Mirinda brands, along with capital investments and all advertising and promotional activities. (Read more)

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