McDonald’s and other well-known American companies are still earning rubles even after Russia invaded Ukraine – and the head of the New York state pension fund is I do not like him.
Neither are many other Americans, as calls are getting louder to boycott other brands still operating in Russia, and hashtags like #BoycottPepsi, #BoycottCocaCola and #BoycottYumBrands are trending on Twitter.
New York State Comptroller Thomas DiNapoli urges companies to reconsider their business activities in Russia as they face “legal, compliance, operational, human rights, personnel and important and growing reputation”.
“Russia’s illegal invasion of Ukraine has led to unprecedented sanctions against Russian companies and individuals,” wrote DiNapoliwhich oversees the roughly $280 billion state pension fund, which also owns stock in the companies.
“While US sanctions already prohibit investment in many Russian companies, I believe it is prudent to freeze purchases in all Russian companies due to the unpredictability of the situation and the likelihood that conditions will deteriorate. .”
In addition to McDonald’s, other companies DiNapoli addressed Friday included:
Not on DiNapoli’s mailing list was Coca-Cola, which announced last week it donated 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 past few days, everyone at Coca-Cola has followed the news from Ukraine with heavy hearts,” the company said in the statement. “Our hearts go out to those affected.”
DiNapoli said Russian President Vladimir Putin’s “messy and tyrannical foreign policy” has already resulted in sanctions that have “hampered Russia’s already weak economic growth.”
“The Russian currency has fallen in just days since the sanctions were instituted,” DiNapoli wrote. “We will continue to monitor these changing events. New York stands with the people of Ukraine. We hope for a peaceful resolution.”
McDonald’s and Coca-Cola are among the companies NBC News contacted for comment on whether they plan to suspend operations in Russia during the war in Ukraine. There was no immediate response.
Other companies like Apple and luxury retailers like Hermès have either suspended sales, imposed restrictions or closed stores in Russia in response to the invasion of Ukraine.
The same goes for retailers like H&M and entertainment giants like Disney and Warner Bros., which announced last week that it was “pausing the release of its feature film ‘The Batman’ in Russia.”
Starbucks top boss Kevin Johnson said in a letter Friday to business partners that they have 130 stores in Russia but none in Ukraine.
Yet, Johnson wrote, Starbucks condemns Russia’s “unprovoked, unjust and horrific attacks on Ukraine.”
“First, we will donate all royalties we receive from our business operations in Russia to humanitarian relief efforts for Ukraine,” Johnson wrote.
Starbucks has also already donated $500,000 to “World Central Kitchen and the Red Cross for humanitarian relief efforts in Ukraine,” Johnson wrote.
McDonald’s opened its first fast food restaurant in Russia 32 years ago during the days of the Soviet Union, and today has 847 restaurants in Russia and 108 in Ukraine.
These restaurants represent 2% of McDonald’s sales, about 9% of its revenue and 3% of its operating profit, depending on the company.
But the fast food chain’s reluctance to speak publicly about the invasion may stem from the fact that only 16% of restaurants in Russia are franchises owned and operated by local Russians and all restaurants in Ukraine are run directly by the ‘business.
“In 2014, after Russia was hit with sanctions in response to its invasion of Crimea, there was a perceived domestic backlash against American businesses, including McDonald’s whose Moscow restaurants were closed for ‘sanitary violations,'” the Bank of America securities analyst said. Sara Senatore wrote in a note to clients on 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 others around the world, we are shocked and saddened by the tragic events unfolding in Ukraine, and we are 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 comes from licensing fees, and these restaurants only account for 2% of the company’s sales.