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business Saturday 12 March 2022
Not all Western companies sever ties to Russia over Ukraine

By TALI ARBEL putting their reputations on their reputations. S anctions across Russia, but not the will keep selling “everyday
AP Business Writer the line. have already taken a toll nearly 1,000 franchisee- essential” Russian-made
A shrinking number of well- Take Japanese clothing on Russia’s economy and owned KFCs, or its 50 Pizza food and hygiene products
known companies are still chain Uniqlo, which drew global trade. Hut locations. to Russians, but that it will
doing business in Russia, negative attention after Some companies that plan This sometimes applies to stop exporting and adver-
even as hundreds have an- the CEO of its parent com- to sever ties with Russia say hotels as well: Marriott says tising these products.
nounced plans to curtail Tech companies have their
ties. own balancing act. Provid-
Burger King restaurants are ers of internet-based servic-
open, Eli Lilly is supplying es like Google, Twitter and
drugs, and PepsiCo is sell- Facebook have been most-
ing milk and baby food, but ly reluctant to take actions
no more soda. that could deprive Russian
The pace of businesses ex- citizens access to informa-
iting Russia accelerated tion other than what they
over the past week as the get from state media. (Rus-
deadly violence and hu- sia blocked Facebook and
manitarian crisis in Ukraine Twitter, however, and then
worsened, and as Western TikTok largely suspended its
governments ratcheted service in the country.)
up economic sanctions to The response from industrial
punish Russia for its two- food producers has been
week-old invasion. Major complicated by Russia’s
oil companies BP and Shell role as a major exporter of
walked away from multi- wheat and other commod-
billion-dollar investments. ities.
McDonald’s and Starbucks Bunge, which has assets of
stopped serving customers. $121 million in Russia, said
The companies that still Thursday that its Russian
have a presence in Russia oilseed plant will operate
say they have franchise A police car is parked in Red Square, with St. Basil’s Cathedral in the background, in Moscow, and serve the domestic
owners or employees to Russia, March 4, 2022. Associated Press market, but that it has sus-
consider; they don’t want pended “any new export
to punish Russians by taking business.” Farm equipment
away food or medicine; or pany told the Nikkei news- it isn’t so simple. its Russian hotels are owned maker John Deere said it
they provide software or paper in a story published Citigroup said Wednesday by third parties, and it’s has stopped machine ship-
financial services for West- Tuesday that the reason that selling its 11 Russian evaluating their ability to ments to Russia; it is moni-
ern businesses that aren’t to keep nearly 50 Rus- bank branches will be dif- remain open. toring a Russian plant that
easy to replace. sian stores open was that: ficult because the coun- “I think a lot of these com- makes seeding equipment
“It’s a business calculation. “clothing is a necessity of try’s economy has been panies are expecting a and its dealer network in
On the stay side: How much life.” By Thursday, Uniqlo cut off from the global fi- backlash if they’re staying,” the country “day-by-day.”
revenue do they earn in said it would close the nancial system. Until then, said Susanne Wengle, a Cargill and ADM, other ag-
Russia? Do they provide stores. Citi said it is “operating the political science professor riculture companies, have
an essential service?” said “There’s potentially a big business on a more limited and Russia expert at Notre not responded to ques-
Mary Lovely, a senior fel- downside of companies basis” and is helping its U.S. Dame. tions.
low at the Peterson Institute to be on the wrong side of and other corporate clients McDonald’s action in Rus- These companies don’t
for International Economics this,” Lovely said. suspend their businesses in sia was easier: it owns most want the Russian govern-
in Washington. “Each day Many large multination- Russia. of the 850 restaurants in ment to seize their assets
that passes, though, calcu- als didn’t flee Russia at the Likewise, Amazon says its Russia it will temporarily should they close up shop,
lations change. Sanctions start of the war. But that biggest cloud-computing close. said Vincent Smith, an eco-
against Russia are likely to changed as the invasion customers in Russia are But there are companies nomics professor at Mon-
last a long time, along with led to increasing violence headquartered elsewhere. that remain in Russia — tana State University.
rising revulsion.” — and more than 2 million The company said Tuesday whether in whole or in part Other companies point to
Some companies in lower- refugees fleeing Ukraine. it has stopped accepting — and say that it’s because their employees’ livelihoods
profile industries like agricul- There are now more than new cloud-computing cus- they view their products as in rationalizing decisions
ture have been able to fly 300 companies that have tomers in Russia and that essential. to stay, or not completely
under the radar and avoid curtailed operations in Rus- it plans to suspend e-com- Pharmaceutical company sever ties.
the type of social media sia, according to a list main- merce shipments to Russia. Eli Lilly is one of them. “We Starbucks initially expressed
pressure that had been di- tained by a team at Yale. Fast-food companies often continue to distribute med- concern for its 2,000 Russian
rected at brands such as Apple stopped shipments. have franchising agree- icines in Russia as patients employees before revers-
McDonald’s, Uniqlo and Google paused ad sales. ments that complicate an with cancer, diabetes and ing course Tuesday. The
Starbucks, before they de- Automakers halted pro- exit, because they don’t auto-immune diseases ev- Kuwaiti company that fran-
cided to cut ties this week, duction. Hollywood studios own those locations. erywhere count on us to chises its 130 Russian stores
if only temporarily. ceased releasing films, and That helps explain why Res- support them,” said spokes- is closing them, but con-
But in this era of hyper- Netflix stopped streaming. taurant Brands Internation- person Tarsis Lopez, noting tinuing to pay employees.
awareness that some cus- Some of these decisions al, owner of Burger King, is that EU and U.S. sanctions British American Tobac-
tomers and even employ- were driven by the need to keeping its 800 restaurants do not apply to medicine. co on Wednesday said it
ees have about the posi- comply with the sanctions open in Russia. And why PepsiCo said it will stop sell- would keep making and
tions companies take on Western governments lev- Yum Brands, parent com- ing soda, but that it will con- selling cigarettes in Russia,
social and moral issues, eled at Russia; others came pany of KFC and Pizza Hut, tinue to supply milk, baby where it has 2,500 employ-
those still doing business because of supply chain is- announced the closure of formula and baby food in ees, citing a “duty of care”
with — or in — Russia are sues or the fear of a hit to 70 company-owned KFCs Russia. And Unilever said it for employees.q