McDonald’s And PepsiCo Under Pressure To Sever Ties With Russia

International food megacorporations McDonald’s and PepsiCo are receiving increasing pressure to break off doing business with Russia in light of the aggressive invasion of neighboring Ukraine.

New York Comptroller Thomas DiNapoli reportedly urged all American companies to reconsider Russia’s business relationships. He said domestic firms are likely to face “significant and growing” risks involving legal, human resources, compliance and reputational issues.

He also said that suspending Russian business operations would help address “various investment risks” in the Russian market and assist with international condemnation of Russia’s part in aggressively and intentionally “undermining the international order.”

McDonald’s and PepsiCo are among many American and European companies considering ending connections to the sizable Russian market. Disney announced last week that it was suspending all film releases in Russian theaters in response to the attack on Ukraine.

Disney said in a press release that the tragic humanitarian crisis resulting from the unprovoked Russian invasion has led to the company’s decision to pause theatrical releases. The company said it will evaluate future decisions about doing business in Russia based on the “evolving situation.” It is also working with NGOs to provide humanitarian aid to refugees from Ukraine.

British Petroleum (BP) announced it is terminating its association with Russian state energy company Rosneft and is selling off its assets held in Russia. BP Chairman Helge Lund said that even though the company has operated inside Russia for 30 years, the current invasion “represents a fundamental change.”

Visa and Mastercard have also ceased operations inside Russia in cooperation with sanctions imposed by Western companies and governments. No matter where they were issued, their cards will not work inside Russia and any cards issued inside Russia will no longer work anywhere in the world.

McDonald’s has been very successful inside Russia since the fall of the Soviet Union. The company is known for its international franchising strategies. Russian outlets have been successful by using food ingredients produced in Russia and crafting menu choices designed around Russian tastes and trends.

PepsiCo has an even more extended history of business success in Russia, dating back to the days of the Cold War with the Soviet Union.

As additional sanctions continue to hammer the Russian economy and citizens, the world awaits the response of Russian President Vladimir Putin.