In Moscow, though, customers may still obtain a Big Mac. Alternatively, a cup of Starbucks coffee. Alternatively, KFC chicken and Papa John's pizza.
Others, particularly in the foodservice and natural-resource-based businesses, say they are stranded while Western corporate titans escape their Russian ties, citing moral and economic imperatives. McDonald's, Starbucks, Papa John's, and Yum Brands — the parent company of KFC and Pizza Hut — have all remained silent on their plans for the business in Russia following the country's invasion of Ukraine, despite mounting pressure from social media and significant investors to do so.
ExxonMobil — in retaliation for the aggressive invasion on Ukraine, which has wreaked havoc and aroused worldwide criticism. Others, like TotalEnergies, a French energy giant, are treading a delicate line by halting new expenditure in Russia but maintaining existing agreements, including a roughly 20% share in Russian gas producer Novatek.
Meanwhile, Boeing indicated Monday that it will hunt for titanium for its passenger planes abroad, although it would not withdraw from a joint venture to make it. Russia's metal sector, which is critical to electric cars and semiconductor chips, is so powerful that analysts believe it is "too huge to penalize."
The moves show how deeply entrenched certain industries are in the regional and Russian economy. Ukraine produces so much wheat that it is regarded as the "breadbasket of Europe" in agriculture. Russia is also a significant grain exporter.
Russia's economy is little in comparison to the US's ($1.5 trillion vs. $20.9 trillion), yet it is much too enormous to be overlooked. Experts believe it would be the equivalent of a large firm leaving Texas.
However, they argue that for economic sanctions to be effective, Russia's financial isolation must go beyond what Western governments can impose, making firms believe that doing business in Russia is harmful for both their public image and their balance sheet.
"The financial effect will not shake the market or their specific stock price," said Gary Kalman, the U.S. director of the anti-corruption organization Transparency International. "I believe the reputational risk is greater in terms of public perception."
Some of these businesses are being chastised on social media as well as by institutional investors. Activists have started circulating lists of companies to boycott on Twitter, including McDonald's, Coca-Cola, PepsiCo, Yum Brands restaurants, and Starbucks.
McDonald's controls the great majority of its over 900 sites in Russia and Ukraine, albeit after Russia's 2014 annexation of Crimea, it sold off 15% of them to franchisees.
Other food companies, on the other hand, do not have nearly as much influence over their activities in Russia. Franchisees hold the majority of Starbucks, Papa John's, KFC, and Pizza Hut stores in Russia, restricting the companies' ability to cut costs.
McDonald's, Coca-Cola, PepsiCo, Yum Brands, and Papa John's all declined to comment when contacted for comment.
Starbucks' 130 Russian outlets are "wholly owned and run by a licensed partner," according to CEO Kevin Johnson in a letter to staff on Friday. According to Johnson, revenues from the company's Russian operations would be donated to humanitarian initiatives in Ukraine.
Heavy-industry companies have had a similar tough time totally removing themselves from Russian markets. Boeing, the Chicago-based aerospace giant, relies on Russian titanium for fasteners and landing gear in commercial planes. Titanium components are also commonly used in aircraft engines.
It halted all titanium purchases from Russia on Monday. It claims it has enough stockpiled to continue making planes in the short future without Russia's assistance.
Boeing, on the other hand, has been tight-lipped about the future of its Russian assets, including a titanium joint venture that began more than a decade ago. It recently renewed that partnership by signing a memorandum of understanding with Russia's VSMPO-AVISMA, which claims to be the world's largest titanium manufacturer.
Sergey Chemezov, the company's chairman, is widely regarded as a close friend of Russian President Vladimir Putin.
In an emailed statement, Boeing spokesman Paul Lewis said, "Our inventory and diversity of titanium sources provide sufficient supply for airplane production, and we will continue to take the right steps to ensure long-term continuity."
Because of Europe's reliance on imported natural gas, TotalEnergies CEO Patrick Pouyanné said at a Monday energy industry conference that his business would not terminate ties with Russia.
Pouyanné said the corporation was not under any pressure from French authorities to terminate connections with Russia, despite the fact that France uses significantly less natural gas than other Western European countries.
According to Reuters, he stated, "I clearly have contacts with the highest authority in my nation, and there is no pressure from them for us to leave Russia."
At least one major public institutional investor has urged businesses doing business in Russia to reconsider their strategies. New York State Comptroller Thomas P. DiNapoli wrote to ten firms with stakes in the state's pension fund on Friday, advising them to rethink their engagement in Russian markets. Companies included McDonald's, PepsiCo, Mondelez, and Kimberly Clark.
New York's retired public officials together own $1.6 billion in the companies, including a $501 million holding in PepsiCo and a $410 million share in McDonald's.
"We think that firms that continue to operate in Russia and invest in Russian assets are exposed to considerable and escalating legal, compliance, operational, human rights, and people concerns, as well as reputational problems." Furthermore, enterprises must guarantee that assets do not get stranded or otherwise hampered by penalties owing to the uncertainty of the situation and the potential that things would deteriorate," DiNapoli added.
Maryland Comptroller Peter Franchot praised American companies who ended their activities and partnerships in Russia on Monday, and urged legal firms, lobbying groups, developers, and accounting firms in the United States to end any ties with the Kremlin or Russian organizations.
"Hitting Putin and his oligarch helpers in the wallet is the most effective approach to stop his unwarranted invasion of Ukraine," Franchot said in a statement. "... Because we are not going to get engaged militarily, we must be ruthless in our attempts to economically and financially cripple them."
