Ukraine. Not all Western companies are cutting ties with Russia

OBurger King restaurants are open, Eli Lilly continues to supply medicine, and PepsiCo is selling milk and baby food, but no soda.

The pace of corporate exits from Russia accelerated last week as the deadly violence and humanitarian crisis in Ukraine worsened and Western governments increased economic sanctions to punish Russia.

Oil majors BP and Shell pulled out, and food chains McDonald’s and Starbucks stopped serving their customers.

Businesses still operating in Russia claim to own a “franchise” and have employees; they say they don’t want to punish the Russians by taking food or medicine away from them; or provide “software” or financial services to Western companies that are not easily replaced.

Some companies in more low-key sectors, such as agriculture, managed to avoid the kind of media pressure aimed at brands like McDonald’s, Uniqlo and Starbucks, before deciding to temporarily sever ties with Russia this week.

But at a time of hyper-sensitivity some customers and even employees have about the positions companies take on social and moral issues, those who still do business with — or in — Russia are putting their reputations at risk.

Many large multinationals did not leave Russia at the start of the war, but that changed as the invasion led to increased violence and more than 2 million refugees from Ukraine.

There are now more than 300 companies that have reduced their operations in Russia, according to a list from Yale University.

Apple halted operations, Google suspended ad sales, Hollywood studios stopped showing movies, and Netflix stopped streaming.

Some of these decisions were driven by the need to comply with sanctions imposed by Western governments on Russia, others were due to supply chain issues or fear of reputational impact.

Some companies are considering severing ties with Russia, but say it’s not that simple.

Citigroup said Wednesday that selling its 11 Russian bank branches will be difficult as the country’s economy has been cut off from the global financial system.

Until then, Citigroup is “operating the business on a more limited basis” and helping its US and other corporate clients suspend operations in Russia.

Similarly, Amazon has stopped accepting new cloud computing customers in Russia and intends to suspend e-commerce shipments to Russia.

Fast food companies often have franchise agreements that make it difficult to exit because they don’t own these locations.

This helps explain why Restaurant Brands International, owner of Burger King, is keeping its 800 restaurants open in Russia. And also why Yum Brands, the parent company of KFC and Pizza Hut, announced the closure of 70 company-owned KFCs across Russia, but not the nearly 1,000 franchise-owned KFCs or its 50 Pizza Hut locations. .

The same is true in many cases in the hospitality industry: Marriott says its Russian hotels are owned by third parties and is evaluating their ability to stay open.

McDonald’s action in Russia has been easier, as it owns most of the 850 restaurants in Russia, which are temporarily closed.

Pharmaceutical company Eli Lilly stays in Russia because it considers its goods essential, just like PepsiCo has the same understanding for selling milk, infant formula and baby food in Russia.

Unilever also said it would continue to sell “everyday essentials” food and hygiene products made in Russia to Russians, but would stop exporting and advertising these products.

Other companies are expressing concern for their employees as they rationalize decisions on whether or not to sever ties with Russia.

British American Tobacco said on Wednesday it would continue to manufacture and sell cigarettes in Russia, where it has 2,500 employees, citing a “duty of care” to workers.

Read also : China, US must ‘talk more’ to face ‘global challenges’

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