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McDonald’s caves to pressure on Russia

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Fast-food giant to temporarily close all of its outlets in Russia in response to Ukrainian conflict

Fast-food chain McDonalds has bowed to increasing public pressure to punish Moscow for its invasion of Ukraine, announcing that it will shut down its restaurants in Russia, at least temporarily.

All of the US company’s operations in Russia will be suspended, although employees in the country will continue to be paid, McDonalds said on Tuesday. It’s impossible to predict how long the shutdown will last, the company added, saying it will continue to assess the situation and determine whether additional measures are required.

“The situation is extraordinarily challenging for a global brand like ours, and there are many considerations,” the restaurant chain said. “For 66 years, we have operated with the belief that communities are made better when there’s a McDonalds nearby.” However, the company added, “Our values mean we cannot ignore the needless human suffering unfolding in Ukraine.”

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McDonalds has operated in Russia for more than 30 years and has outlets in 850 communities. It also has about 62,000 employees in the country and works with hundreds of local suppliers. Ronald McDonald House Charities, which will continue operating in both Ukraine and Russia, are providing humanitarian aid to refugees displaced by the war.

“As a system, we join the world in condemning aggression and violence and [are] praying for peace,” McDonalds said, adding that it was continuing to pay the salaries of its workers in Ukraine and had donated $5 million to an employee assistance fund in the former Soviet republic.

McDonalds follows dozens of international companies in announcing that they’re shutting down operations in Russia. Some, such as major oil companies BP and Exxon Mobil, have quit Russia permanently, walking away from billions of dollars in Russian assets.

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© RIA / Vladimir Fedorenko
Russia’s ruling party suggests nationalization of foreign businesses

Western companies that haven’t joined in the exodus, such as Coca-Cola, have faced increasing criticism and threats of boycotts. NBC News, for instance, said on Monday that McDonalds was still “raking in the rubles” despite Moscow’s invasion of Ukraine.

Institutional investors, such as New York state comptroller Thomas DiNapoli, have urged companies to pull out of Russia. A Yale professor has compiled a closely watched spreadsheet on the status of companies with Russian operations to help ramp up pressure to punish Moscow. The professor, Jeffrey Sonnenfeld, has reportedly called for businesses to help trigger an economic collapse in Russia, telling the Washington Post, “This is one step away from open warfare.”

However, caving to pressure campaigns isn’t without risk. Russia’s ruling political party has proposed nationalizing the production of companies that close Russian operations. “This is an extreme measure, but we will not tolerate stabs in the back, and we will protect our people,” United Russia official Andrey Turchak said on Monday.

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