Senin, 23 Mei 2022

Starbucks to exit Russia after nearly 15 years - Daily Mail

Starbucks is latest firm to pull out of Russia: US coffee chain closes 130 stores across country after 15 YEARS over Putin's invasion of Ukraine as it joins McDonald's in exodus of brands

  • Seattle-based Starbucks has 130 stores in Russia but they will be closed
  • They are operated by Kuwait-based licensee Alshaya Group, with 2,000 employees in country
  • The decision to wind down its operation in Russia is different to other companies
  • McDonald's said that it was selling its restaurants in Russia to the local licensee
  • But Starbucks said that it'll still support staff there, including pay for six months

Starbucks is following a mass exodus of corporate American food companies that are putting economic pressure on Russia pulling out of the country.

The Seattle coffee company will withdraw after suspending operations in their 130 cafes in March. It will mean the loss of nearly 2,000 jobs with the franchise operator the Kuwait-based Alshaya Group. It will continue to pay workers for the next six months.

'As we mentioned on March 8, we have suspended all business activity in Russia, including shipment of all Starbucks products,' the company said in a statement. 'Starbucks has made the decision to exit and no longer have a brand presence in the market.' 

MacDonald's, Pepsi and Cocoa-Cola have all announced that they will sell their operations in Russia. Fast-food companies Pizza Hut, KFC and Taco Bell have halted operations in the country.

Starbucks' decision to wind down its operation in Russia is different to the approach some other foreign companies have taken.

Seattle-based Starbucks has 130 stores in Russia, operated by its licensee Alshaya Group, with nearly 2,000 employees in the country

McDonald's last week said it was selling its restaurants in Russia to its local licensee Alexander Govor to be rebranded under a new name, but will retain its trademarks, while France's Renault is selling its majority stake in Russia's biggest carmaker with an option to buy back the stake.

A slew of other Western companies, including Imperial Brands and Shell, are cutting ties with the Russia market by agreeing to sell their assets in the country or handing them over to local managers.

The coffee company is not retaining the options to return. 

In March, Starbucks shuttered its stores and suspended all business activity in Russia, including the shipment of its products to the country, following Moscow's invasion of Ukraine.

Starbucks did not provide details on the financial impact of the exit. McDonald's had said it would take a primarily non-cash charge of up to $1.4 billion.

CEO Kevin Johnson said in March that he 'condemns the horrific attacks on Ukraine by Russia and our hearts go out to all those affected.' 

It's been rough sledding in Russia for the caffeine purveyor from the start.

They were unable to enter the market initially because Sergei A. Zuykov, a trademark squatter, had the intellectual property rights to their name. The Russian lawyer offered to sell them back their name for $600,000, but the company refused. In 2005 Starbucks eventually won the name back in a civil case.

The company opened its first outlet at the Mega Khimki shopping mall in September 2007, followed three months later by a second branch in the Arbat district.

Starbucks banned smoking in all its Russian outlets in 2011, three years before smoking was prohibited from public places in the rest of the country. 

Companies that stopped doing business in Russia 

  • McDonald's
  • KFC
  • Taco Bell
  • Pizza Hut
  • Cocoa-Cola
  • Pepsi
  • Starbucks
  • Uniqlo
  • British American Tobacco
  • Ikea
  • H&M
  • Canada Goose
  • NestlĂ©
  • Nike
  • TJ Max
  • Unilever
  • BP
  • Exxon Mobil
  • Shell
  • Volvo 
  • Siemens
  • Renault
  • Caterpillar
  • Delta Air Lines
  • United Airlines
  •  DHL
  • Hilton hotels
  • Hyatt hotels
  • American Airlines
  • Uber
  • Sony
  • Microsoft
  • Apple
  • Netflix
  • Bloomberg
  • Walt Disney
  • Warner Brothers 

Although the company was not an official sponsor of the 2014 Olympics in Sochi, Russia, there was a secret coffee kiosk set up for NBC broadcasters, according to the Wall Street Journal.

In a statement to DailyMail.com on Tuesday, Yum Brands said that it is suspending all investment and development of new restaurants in Russia, and that it will donate all profits from operations in Russia to humanitarian efforts.

'Like so many across the world, we are shocked and saddened by the tragic events unfolding in Ukraine,' a Yum Brands spokesman said.

But so far the company has resisted calls to close restaurants in Russia, which include about 1,000 KFC locations and 50 Pizza Huts.

Most of those locations are operated through franchise or licensing agreements, which may complicate the company's ability to shut them down.

Coca-Cola said its business in Russia and Ukraine contributed about 1 to 2 percent of the company's net operating revenue in 2021.

'Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine,' the company said. 'We will continue to monitor and assess the situation as circumstances evolve.'

Pepsi has two production plants in Russia and sells snacks and beverages in the country, according to its most recent annual report for 2021. 

PepsiCo, whose sodas were one of the few Western products allowed in the Soviet Union prior to its collapse, said it would continue to sell daily essentials, such as milk and other dairy offerings, baby formula and baby food, in Russia. 

'As many of you know, we have been operating in Russia for more than 60 years, and we have a place in many Russian homes,' PepsiCo CEO CEO Ramon Laguarta said in a note to global employees.

'However, given the horrific events occurring in Ukraine we are announcing the suspension of the sale of Pepsi-Cola, and our global beverage brands in Russia, including 7Up and Mirinda,' he continued.

Laguarta said PepsiCo is also be suspending capital investments and all advertising and promotional activities in Russia. 

Pepsi has two production plants in Russia and sells snacks and beverages in the country, according to its most recent annual report for 2021. 

PepsiCo, whose sodas were one of the few Western products allowed in the Soviet Union prior to its collapse, said it would continue to sell daily essentials, such as milk and other dairy offerings, baby formula and baby food, in Russia. 

'As many of you know, we have been operating in Russia for more than 60 years, and we have a place in many Russian homes,' PepsiCo CEO CEO Ramon Laguarta said in a note to global employees.

'However, given the horrific events occurring in Ukraine we are announcing the suspension of the sale of Pepsi-Cola, and our global beverage brands in Russia, including 7Up and Mirinda,' he continued.

Laguarta said PepsiCo is also be suspending capital investments and all advertising and promotional activities in Russia.

It has also parked a Ronald McDonald House Charities mobile medical care unit at the Polish border with Ukraine; another mobile care unit is en route to the border in Latvia, the company said.

In his own memo, the Starbucks CEO said that 'we condemn the horrific attacks on Ukraine by Russia and our hearts go out to all those affected.'

'We continue to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia, including shipment of all Starbucks products,' Johnson added. 

Many corporations have ceased operations in the country in protest of the Ukraine invasion. 

Among them is consumer goods conglomerate Unilever, which on Tuesday said it has suspended all imports and exports of its products into and out of Russia, and that it will not invest any further capital into the country.

Last week, New York State Comptroller Thomas DiNapoli - a trustee of the state's pension fund, which is a McDonald's investor - sent a letter to McDonald's urging it to consider pausing its operations in Russia.

'We believe that companies that continue to operate in Russia and invest in Russian assets face significant and growing legal, compliance, operational, human rights and personnel and reputational risks,' DiNapoli wrote.

In a White House speech, President Joe Biden promised to hunt down oligarchs' assets, praised Ukrainian resistance and condemned the Russian leader for failing to allow ceasefires for humanitarian relief.

'Putin seems determined to continue on his murderous path no matter the cost,' he said. 

But as he tightened the economic noose on Moscow, Biden said Putin had miscalculated.

'He has already turned two million Ukrainians into refugees,' he said. 

'Russia may continue to grind out its advance at a horrible price, but this much is already clear: Ukraine will never be a victory for Putin.

'Putin may be able to take a city, but he'll never be able to hold the country. 

'And if we do not respond to Putin's assault on global peace and stability today, the cost of freedom, and to the American people, will be even greater tomorrow.'

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2022-05-23 17:21:11Z
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