McDonald’s has initiated a process to sell its business in Russia after 30 years of operating its restaurants in the country in the light of Moscow’s war on Ukraine.
The fast-food operator said the humanitarian crisis caused by Russia’s invasion and the unpredictable operating environment meant continuing operating in Russia was untenable as it was no longer “consistent with McDonald’s values”.
The company intends to “de-arch” the outlets, removing the McDonald’s name, logo, branding, and menu, before they are sold. It will, however, retain its trademarks in Russia.
Chris Kempczinski, the chief executive of McDonald’s, said in a statement: “We have a commitment to our global community and must remain steadfast in our values. And our commitment to our values means that we can no longer keep the arches shining there.”
In a letter to employees, he added: “It is impossible to ignore the humanitarian crisis caused by the war in Ukraine. And it is impossible to imagine the golden arches representing the same hope and promise that led us to enter the Russian market 32 years ago.”
The planned sale comes after McDonald’s said in March that it was temporarily closing its 850 restaurants in Russia, including its site in Pushkin Square in Moscow, which was the first in the country.
When the store opened on 31 January 1990, thousands of Soviets lined up for hours to taste the Big Mac, a symbol of American capitalism.
The Chicago-based company, owns 84% of its stores in Russia, and has said that its restaurants there and in Ukraine contributed 9% of its annual revenue, or about $2 billion (£1.6 billion).
As part of the exit, the company expects to record a non-cash charge of between $1.2 billion and $1.4 billion.
“The humanitarian crisis caused by the war in Ukraine, and the precipitating unpredictable operating environment, have led McDonald’s to conclude that continued ownership of the business in Russia is no longer tenable,” McDonald’s said.
The sale of its Russian business comes after numerous western brands have temporarily or permanently closed down operations in the light of the invasion of Ukraine.
Starbucks, Coca-Cola, and Pepsi have paused operations in Russia, as have consumer brands including Netflix, Levi’s, Burberry, Ikea, and Unilever, the owner of Marmite and Ben & Jerry’s.
Companies around the world have been scrambling to assess their links with Russia after the US, EU, and UK sought to isolate it economically with sanctions.
Sanctions have also made it illegal for US, EU or UK companies to serve some of the biggest Russian businesses, including banks such as Sberbank, Gazprombank, and VTB.
Source: The Guardian