PepsiCo (NASDAQ:PEP)Starbucks Corp (NASDAQ:SBUX)McDonald's Corp (NYSE:MCD)The Coca-Cola Company (NYSE:KO)Amazon.com Inc (NASDAQ:AMZN)Nestle S.A. (OTC:NSRGF, VTX:NESN)Time Warner Inc (NYSE:TWX)Sony Group Corp (NYSE:SONY)Even as a number of corporations withdraw from Russia in response to the unprecedented sanctions following its invasion of Ukraine, several multinational companies are exploring ways to provide support to their Russian employees.
New York-based Pepsi said it will suspend its sales in Russia. Additionally, the company will cease all capital investments and promotional activities, but will continue manufacturing milk, baby food, and formula, primarily to support its 20,000 Russian employees and 40,000 Russian agricultural workers who are part of its supply chain.
In an email to employees, PepsiCo (NASDAQ:PEP) CEO Ramon Laguarta said, "Now more than ever we must stay true to the humanitarian aspect of our business."Caterpillar Inc. (NYSE:CAT)Imperial Brands PLC (LSE:IMB)Philip Morris International Inc (NYSE:PM)
In a tweet, General Electric (NYSE:GE) said it would partially suspend its operations in Russia. There would be two exceptions, GE said: essential medical equipment and power services already existing in Russia.
Last Friday, Starbucks pledged to donate all profits from its 130 Russian coffee shops to humanitarian relief efforts in Ukraine. The stores are operated and owned by Kuwaiti franchisee Alshaya Group. However, on Tuesday, the company changed course and decided to temporarily close those stores. Starbucks' Russian employees will continue to be paid by Alshaya Group, Starbucks president and CEO said in an open letter to employees.
Many well-known global brands and symbols of US corporate might have announced that their businesses in Russia will be temporarily suspended. Despite temporary closures of its 850 stores across Russia, Chicago-based McDonald's said it will continue to pay its 62,000 Russian employees "who have poured their heart and soul into our McDonald’s brand."
"Our values mean we cannot ignore the needless human suffering unfolding in Ukraine," McDonald’s president and chief executive Chris Kempczinski said in an open letter to employees.
Humanitarian concerns continue to be expressed by companies regarding the general Russian population.
As Japan's Sony and Nintendo cease business in Russia, Sony Group announced a donation of US$2mln to the UN High Commissioner for Refugees and Save the Children "to support the victims of this tragedy".
Burger King also stepped in. In addition to redirecting its profits from its 800 Russian restaurants to relief efforts, the burger giant has also donated US$2mln in food vouchers to Ukrainian refugees.
Nestle continues to sell some food in Russia despite its suspension of capital investment. The Ski yogurt and KitKat chocolate manufacturer will continue to produce "essential" foods in Russia. "As a food company and employer, we also have a responsibility toward the people in Russia and our more than 7,000 employees, most of whom are locals," the company said.
The Swiss company's move follows similar moves by other food manufacturers in the last 24 hours, including PepsiCo (NASDAQ:PEP) and Unilever, which have curtailed their activity in Russia while keeping their "essential" food sales in the country.
Another company continuing to produce goods in Russia is Mars. Despite Mars' announcement on March 1 that it was suspending advertising in Russia and Belarus, the company will continue production at its factories, where it has reportedly invested more than US$2bn.
A significant amount of Mars' pet food is made in Russia, where it operates five facilities that manufacture products such as Whiskas, Pedigree, Chappi, and Sheba.
Mars is to donate US$2mln to support humanitarian efforts in Ukraine, according to Grant F. Reid, chief executive. "We join the world in supporting the innocent victims of this war and calling for a peaceful resolution immediately," Reid said in a statement.
Exiting Russia
Corporates may be voicing humanitarian concerns, but the march to exit Russia has been gaining precedence with some big brands.
Amazon became the latest company to suspend operations in Russia, reportedly cutting off Prime Video access and product shipments, according to Variety.
WarnerMedia CEO Jason Kilar also announced that the entertainment conglomerate is pausing all new business in Russia.
Coca-Cola announced it would suspend its business in Russia, but provided little information. In Russia, Coke's largest market, Coca-Cola Hellenic Bottling is home to 10 bottling plants. Coca-Cola holds a 21% stake in Coca-Cola Hellenic Bottling.
Japanese company Nintendo announced it would suspend all exports to Russia "for the foreseeable future". It cited "volatility in shipping and distribution logistics.".
Another Japanese electronics and construction equipment maker, Hitachi, announced it would suspend operations in Russia due to variations in its supply chain.
Companies such as Sony, Nestle, and Caterpillar have joined the line out of Russia even as other western firms are under pressure to act. Mondelez (NASDAQ:MDLZ) International has also scaled back operations.
Heineken, the world's second-largest beer company, said Wednesday, it would cease all production, advertising and sales of the Heineken brand in Russia, as a result of the continuing escalation of the war.
Last week, the Dutch brewer halted new investments and exports to Russia. "We are shocked and saddened to watch the tragedy in Ukraine unfold," Heineken chief executive Dolf van den Brink said in a statement.
Even tobacco companies have joined the exodus. Imperial Brands, which makes JPS and Winston cigarettes in Russia, has suspended all operations, including operations at its Volgograd factory.
Imperial Brands said its decision was made following international sanctions on Russia, which have caused severe disruptions in the market.
Although its Ukraine operations have already been halted, the British firm said it will support its Russian employees, who will continue to receive their salaries.
For the full year of 2021, Russia and Ukraine accounted for about two percent of the group's net revenue and 0.5% of its adjusted operating profit.
Rival tobacco brand Philip Morris International, which makes the popular cigarette Marlboro, said Wednesday it has suspended plans for investments in Russia, including new product launches, and will scale down its manufacturing in the country rather than halt it like Imperial.
Nationalising factories
As companies distance themselves from the turmoil, Andrey Turchak, the Secretary General of United Russia, the largest political party in the country, proposed on March 8 to nationalise overseas factories that had decided to leave after the Russian invasion of Ukraine.
In a statement on the United Russia website, Turchak mentioned Valio, Fazer and Paulig by name, and said, "United Russia proposes nationalising the production of those companies that announce their exit and the closure of production in Russia during the special operation in Ukraine.
"This is an extreme measure but we will not tolerate stabs in the back, and we will protect our people. This is a real war, and not against Russia as a whole, but against citizens. We will not look at it indifferently. We will take tough retaliatory measures, acting in accordance with the laws of war."