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No more cola, burgers: Western food, beverage suppliers suspend work in Russia

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EDITOR'S CHOICE

Foreign restaurant chains and food suppliers are following in the footsteps of other industries, starting to announce suspension of their operations in Russia.

That’s taking place amid Russia’s special operation in Ukraine and new Western sanctions against Moscow. TASS has put together the highlights of the decisions by foreign companies.

Fast food

– The US company McDonald’s announced plans to temporarily close all its 850 restaurants in Russia. But they continue to work, and the Russian hotline was unable to clarify when the decision to suspend operations will come into force. The company promised to continue to pay salaries to Russian employees, who number a total of 62,000 people.

– The US-based Yum! Brands, which owns the KFC and Pizza Hut chains, suspended investments in Russia and plans no new openings. Outlets that are run by the company, rather being franchises, will suspend work.

– The fast food restaurant chain Burger King denied speculation it was leaving Russia. It said it will continue to work in the country, will open new restaurants in 2022 and “still regards the country as one of its strategic markets.” Difficulties with the supply of some ingredients are temporary and not critical, the company said.

– US-based Starbucks will for now shut down its operation in Russia, including food supplies to Russia.

Non-alcoholic beverages

– The Coca-Cola Company, which produces non-alcoholic beverages, will temporarily halt work in Russia. It has 10 bottling plants across the country.

– PepsiCo won’t be selling beverages for now, including 7Up and Mirinda, and buy advertising in Russia. The company will continue to sell essential goods such as baby formulas and dairy products. PepsiCo will support 20,000 of its employees in Russia and 40,000 workers in the farming industry that are engaged in supplies.

Alcoholic beverages

– Heineken is suspending beer exports and investment projects in Russia. The production and sale of beer under the Heineken brand will temporarily be halted. At the same time, Heineken’s Russian factories, as well as operating and commercial divisions, aren’t being shut down. Heineken, whose portfolio includes such brands as Amstel, Okhota and others, has seven breweries in Russia. The company also refused to receive a profit from the operating activities of its Russian division. The company said that caring about employees will remain its priority.

– Carlsberg, which owns the Tuborg, Holsten and Kronenbourg brands, is also giving up new investments in Russia and exports of products from other divisions to the Russian Baltika. The Danish company assured that it is “strives to support employees.” Baltika is going to adapt processes and plans to the new changes.

– Diageo, the world’s largest producer of alcoholic beverages, which owns such brands as Guinness, Baileys, Captain Morgan and others, has suspended supplies to Russia.

Food

– The Finnish manufacturer of dairy products Valio has decided to wind down its work in Russia. The company owns a plant near Moscow, employing 400 people. Whether it will support its employees hasn’t been reported.

– The coffee producer Paulig, based in Finland, has also announced its departure from Russia, but it didn’t say what will happen to 200 employees of its plant in the Tver Region.

– The Finnish company Fazer, which produces chocolate and bakery products, has stopped work in Russia. The company’s enterprises in Moscow and St. Petersburg employ 2,300 people.

– The UK tobacco company Imperial Brands, which produces the brands Davidoff, Richmond and Gitanes, will temporarily stop sales, manufacture and advertising of its products in Russia. Russian employees will continue to get paid. The company has a factory in Volgograd.

– The French food company Danone said that it will remain in the Russian market. The company intends to continue to provide consumers and patients with food.

What happens to employees?

– If the company stopped or suspended working, the employer is required to continue paying employees, said Alexander Shershukov, deputy head of the Federation of Independent Unions of Russia (FNPR). He said when workers are laid off, they must be given a notice in accordance with Russian law. If people’s rights are violated, the union at the company may be able to defend them. A person can also do this on his own by contacting the government’s labor rights services or taking the matter to court.

– Unemployment isn’t expected to rise in the restaurant business segment, Sergey Mironov, president of the Union of Restaurant Managers of Russia and ombudsman for the restaurant business in Moscow, told TASS. McDonald’s employees will try to get jobs elsewhere in a jobs market that has a shortage of workforce, he said. He also explained that it would be a challenge for the KFC fast-food chain to completely leave Russia, since most of its outlets operate as franchises.

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