Drinks giants Coca-Cola and PepsiCo, fast food chain McDonald’s and coffee house Starbucks have bowed to increasing pressure to halt operations in Russia amid the country’s invasion in Ukraine.
Coke said it was suspending its business in Russia, while PepsiCo added, “given the horrific events”, it would stop selling Pepsi-Cola and other global brands, including 7Up.
Pepsi also put a stop to capital investments and all advertising and promotional activities in Russia. However, the group, which has a bigger operation in Russia than its rival, will continue to make other products in the country, including daily essentials such as milk and other dairy offerings, baby formula and baby food.
“As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business,” CEO Ramon Laguarta to staff said in a letter to staff.
“That means we have a responsibility to continue to offer our other products in Russia. By continuing to operate, we will also continue to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain as they face significant challenges and uncertainty ahead.”
McDonald’s is temporarily closing more than 800 sites in Russia, with Starbucks shuttering 100 shops.
And in wider retail, Mothercare also confirmed this morning on the London Stock Exchange it was suspending all business in Russia, which accounts for about 25% of its worldwide sales and contributed £500k a month to profits.
Consumer groups have been under intensifying pressure to make a stand against Russia as the conflict in Ukraine escalated, with #BoycottMcDonalds and #BoycottCocaCola trending on Twitter as the two continued to operate in the country.
A short statement from Coca-Cola overnight said: “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.”
Eastern European bottler Coca-Cola HBC, which has significant exposure in Russia and Ukraine, said in a statement this morning that it respected Coke’s decision and was working in close alignment on its implementation.
“We will thoughtfully consider the interests of our employees, customers, and suppliers in Russia,” the bottler added.
“Our relationship with The Coca-Cola Company remains strong, and we continue to work in close partnership across the rest of our markets.
“Our hearts go out to all the people affected by the unimaginable tragedy in Ukraine. We continue to provide support on the ground in partnership with The Red Cross. We are grateful to all our employees in particular those that have been providing personal support. We add our voice to the many who desperately want peace to return to Ukraine.”
A longer letter was sent by PepsiCo CEO Ramon Laguarta to staff updating on its activities as “the tragic war continues in Ukraine”.
“My heart goes out to all those who are caught in the middle of this deadly conflict,” he wrote. “As it so often does, war is falling hardest on the innocent. War is never an answer, and we join all those calling for a speedy, peaceful resolution.”
Pepsi has been operating in Russia for more than 60 years and entered the market at the height of the Cold War between the Soviet Union and the US, which Laguarta said “helped create common ground” between the two empires.
Morning update
The FTSE 100 opened strongly this morning by 2.2% to 7,118.1p despite ongoing investor fears and unprecedented plans by the West to ban Russian oil and gas imports.
Shares in Coca-Cola HBC shot up 2.7% to 1,499.5p on the back of this morning’s statement supporting the wider Coke group.
Mothercare plunged 26% to 10.1p as markets assessed the hit to its profits from the suspension of Russia shipments. The retailer has lost 45% of its value in the past month.
Yesterday in the City
The FTSE 100 clawed back a scrap of lost ground yesterday despite ongoing investor fears about stagflation and the Ukraine conflict. London’s blue-chip index rose 0.1% to 6,964.11pts.
Bakery chain Greggs fell 3.4% to 2,206p after its boss warned operating costs were rising faster than expected in 2022. The group reported a return to sales growth and profitability last year as it bounced back from the pandemic.
Prepared foods group Bakkavor ended the day level at 108.8p following better-than-expected full-year results, as sales increased 4.4% to £1.9bn on the back of a recovery in the UK food-to-go market.
Shares in Danone fell 1.3% to €47.42 despite new CEO Antoine de Saint-Affrique unveiling his new strategy for the group.
The main risers yesterday included Devro, up 6.1% to 190.4p, Domino’s Pizza Group, up 5.9% to 369.4p and Greencore Group, up 1.8% to 116.9p.
Ocado led the fallers, down 7% to 1,098.5p after the latest Nielsen grocery figures showed a further drop in demand for online sales. Other fallers included Kerry Group, down 5.8% to €94.24, McColl’s Retail Group, down 6% to 2.2p, and Just Eat Takeaway, down 4.7% to 2,237p.
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