Coke, Pepsi and Starbucks Halt Business in Russia

As pressure mounts, Coca-Cola, PepsiCo and Starbucks are all pausing their business in Russia, joining a sprawling list of brands that have suspended any presence in the country during its invasion of Ukraine. The announcements from the three companies came within two hours of each other and followed closely behind that of another major U.S.-headquartered corporation: McDonald's. The global fast food chain announced earlier today that it was suspending operations of its 847 Russia-based restaurants, though continuing to pay its 62,000 employees in the country. As the war continued to escalate over the past two weeks, supporters of Ukraine have increasingly called for McDonald's, Coca-Cola, Pepsi and Starbucks to follow their corporate peers in halting Russian operations. Today, those multibillion-dollar dominos finally fell. "The Coca-Cola Company announced today that it is suspending its business in Russia," the brand announced in a statement. "Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine. We will continue to monitor and assess the situation as circumstances evolve." Crisis in Ukraine: How Brands Are Stepping Up to Help Ukraine and Russia contributed between 1% and 2% of Coca-Cola's consolidated net operating revenue and operating income in 2021. PepsiCo's exit from Russia has cultural significance, as it was one of the few Western products allowed in the Soviet Union prior to its collapse. "We have been operating in Russia for more than 60 years, and we have a place in many Russian homes," PepsiCo CEO Ramon Laguarta said to the brand's staff. "Pepsi-Cola entered the market at the height of the Cold War and helped create common ground between the United States and the Soviet Union. 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. We will also be suspending capital investments and all advertising and promotional activities in Russia." Pepsi generated $3.4 billion of revenue in Russia last year, roughly 4% of its annual revenue of $79.4 billion. The beverage giant said it will keep selling essential products such as baby formula, milk and baby food in Russia. Starbucks has 130 stores in Russia that are wholly owned and operated by a licensed partner. "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," Starbucks CEO Kevin Johnson said in a note to the company's staff. "Our licensed partner has agreed to immediately pause store operations and will provide support to the nearly 2,000 partners in Russia who depend on Starbucks for their livelihood." The news comes after many brands have been trending on social media for their inaction, with calls to boycott from the public. In a recent YouGov Direct poll that surveyed 2,000 people on March 3, 82% of U.S. adults said they feel brands should stop doing business in Russia. Only 10% of participants said companies should not cease operations in Russia. McDonald's Closes All Stores in Russia But Pledges to Keep Paying 62,000 Employees There

Ukraine

Coke, Pepsi and Starbucks Halt Business in Russia

The decisions come after heavy pressure on global brands to respond to the invasion of Ukraine

Rafael Canton

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Rafael Canton