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business Saturday 19 March 2022
Pressure mounts for multinationals in Russia to leave

By TALI ARBEL closing my doors if Mr. Putin
AP Business Writer doesn't want me to close
As the war in Ukraine drags them," he said.
on, international compa- Still, those restaurants may
nies still in Russia are com- have difficulties getting
ing under increasing pres- their usual food supplies,
sure to leave. making it tough to serve
Some seem to be deter- popular menu items, said
mined to stay, some say Adam Werner, global co-
they are reconsidering or leader of the restaurants,
trying to figure out an exit hospitality and leisure prac-
and some aren't speaking tice at AlixPartners.
at all — a testament to the Restaurant Brands Interna-
fraught nature of the situa- tional, the Toronto-based
tion. company that owns Burger
Ukrainian President Volody- King, said Thursday that it
myr Zelenskyy is stepping has begun the process of
up the country's pleas to exiting its 15% stake in a
pressure companies to exit joint venture that operates
Russia. In an address to around 800 Burger King res-
Congress Wednesday, he taurants in Russia. Burger
asked lawmakers to press King said it contacted the
U.S. businesses still operat- Russian operator of its res-
ing in Russia to leave, say- taurants, Alexander Kolob-
ing the Russian market is ov, and demanded that he
"flooded with our blood." suspend operations, but he
"Make sure that the Rus- refused. In the meantime,
sians do not receive a Burger King said it has sus-
single penny that they use In this Feb. 9, 2011, photo, a shopper passes Nabisco products, a Mondelez International brand: pended corporate support
to destroy our people in Premium saltines, Triscuits, Ritz crackers and Wheat Thins, at a supermarket in Los Angeles. for the Russian market.
Ukraine," Zelenskyy said. "Would we like to suspend
In a separate Tuesday ad- Charles Koch is famous it has an "essential role in spending not related to its all Burger King operations
dress, Zelenskyy called out for funding conservative feeding the Russian people medicines and vaccines. immediately in Russia? Yes.
food companies Nestle causes, dug into that po- and pets." Profits from the But it remains committed to Are we able to enforce a
and Mondelez, consumer sition, saying Wednesday Russia business will go to providing medicine there suspension of operations
goods makers Unilever and that it has two glass manu- humanitarian causes. Mars and continuing clinical tri- today? No," said David
Johnson & Johnson, Euro- facturing factories in Russia did not respond to ques- als. Shear, Burger King's interna-
pean banks Raiffeisen and that employ 600 people, tions Thursday. Major fast-food companies tional president, in a state-
Societe General, electron- and it's not going to aban- This strategy falls short, said like McDonald's shut down ment. Some companies
ics giants Samsung and don that business. Raj Bhala, a professor at restaurants they owned; continue to review their po-
LG, chemicals maker BASF, "We will not walk away from the University of Kansas law franchising agreements sition in Russia as pressure
and pharmaceuticals Bay- our employees there or school. "We want to do ev- complicated the matter mounts. The Austrian bank
er and Sanofi, saying they hand over these manufac- erything short of violence for some others. Parent Raiffeisen said Thursday
and "dozens of other com- turing facilities to the Rus- to stop the war," he said. "It companies don't control that it is "assessing all stra-
panies" have not left the sian government so it can is better, as President Zelen- franchisees and can't or- tegic options for the future
Russian market. operate and benefit from skyy is suggesting, to inflict der them to close, said Mi- of Raiffeisenbank Russia, up
The U.S. and its allies have them," said Koch President pain on everyday Russian chael Seid, the founder of to and including a carefully
already put a slew of sanc- Dave Robertson in a state- consumers in the hopes MSA Worldwide, a global managed exit."
tions in place aimed at ment. "Doing so would only that they may rally, or rally franchise advisory firm. The Multinational companies
crippling the Russian econ- put our employees there at further, against their gov- franchisees run the business have to weigh their de-
omy. Hundreds of interna- greater risk and do more ernment and against the independently, and they sire for operations in Russia
tional companies have an- harm than good." war." are responsible for wages, when, or if, the war is over
nounced that they are cur- Major European and U.S. There are other companies food and other costs. with the potential hit to their
tailing operations in Russia. consumer-goods compa- that consider their opera- Even if Russia franchisees reputations and harm their
Companies that have nies like Unilever, PepsiCo tions essential. Eli Lilly, the wanted to close, they face business in larger Western
kept operations in Russia and Nestle say they are scal- drugmaker, has said that pressure to keep them markets. In Poland, some
say they provide essential ing back business to focus sanctions don't apply to open under Russia's Presi- consumers are saying they
services, like food or medi- on essentials, but haven't medicine and that it has dent Vladimir Putin, Seid won't shop at stores owned
cine, that are unaffected exited Russia. For example, a responsibility to Russian added. by a French company that
by sanctions. In some in- candy and pet food com- patients. Sanofi said Thurs- "The ultimate franchisor in continues to operate in
dustries, like hotels or res- pany Mars, which has been day that it would suspend Russia is Putin and I wouldn't Russia, according to local
taurants, it's difficult to shut in Russia for decades and advertising in Russia and want to be sitting in Russia media.q
down because of franchis- has nearly 6,000 employ-
ing deals. They have said ees and several factories LIKE US ON
they don't want to punish there, said last week that it
their employees. would suspend new invest-
There's also a risk that the ments in the country as well
Russian government will as imports and exports into
expropriate Western as- Russia, and pause ads and
sets like factories if they are social media.
abandoned. Koch Indus- But Mars will continue to sell Facebook.com/arubatoday/
tries, whose billionaire CEO pet food and food, saying