The fast-food giant said it made the decision because of the “humanitarian crisis” and “unpredictable operating environment” caused by the Ukraine war
Mc Donald’s has announced to permanently leave Russia after 30 years and has started to sell its 850 restaurants in the country, owing to Russia’s invasion of Ukraine and humanitarian crisis created in Ukraine.
It was the first United States (U.S.) based company to open outlets in Russia after Soviet Union opened its economy in 1990. The fast-food giant said it made the decision because of the “humanitarian crisis” and “unpredictable operating environment” caused by the Ukraine war. It said that owning a business in Russia was “no longer tenable” or consistent with its values.
Earlier in March 2022, the company announced to temporarily close its 850 outlets but would continue to pay its 62,000 employees. The company is now pursuing the sale of all its restaurants to a local buyer and intends to start the process of “de-arching” the sites so they no longer use the McDonald’s name, branding and menu. However, it said it would continue to keep its trademarks in Russia.
The company will continue to pay all its employees till the sales are completed and will also ensure they have future employment with any potential buyer.
Speaking on the occasion, the President and Chief Executive Officer (CEO) of Mc Donald’s – Chris Kempczinski, said, “Our commitment to our values means that we can no longer keep the Arches shining there.”
He said that the move was extremely difficult but it must stick to its values. Last year Russia and Ukraine accounted for about 9% of McDonald’s global sales. The chain’s 108 restaurants in Ukraine remain close due to the conflict but the company is continuing to pay full salaries to all its employees there.
McDonald’s initially faced criticism for being slow to halt its business in Russia, with some calling for a boycott of the company before it suspended operations in March.
Besides, several leading brands like Starbucks, Coca Cola, Levi’s and Apple, have left Russia or have suspended sales there. Companies like Burger King and Marks and Spencer are still operating because they say they are unable to close stores due to complex franchise deals.
Separately, the French carmaker Renault has announced to sell its business in the country. It’s 68% stake in carmaker Avtovaz would be sold to a Russian Central Research and Development Automobile and Engine Institute (Nami), while its shares in Renault Russia will go to the city of Moscow, which confirmed that Renault’s Russian assets had now become state property – marking the first nationalisation of a major foreign business since the invasion of Ukraine.
The Russian Industry and Trade Minister – Denis Manturov said, “Agreements were signed on the transfer of Russian assets of the Renault Group to the Russian Federation and the government of Moscow.”
The CEO of Renault – Luca de Meo said, “Today, we have taken a difficult but necessary decision; and we are making a responsible choice towards our 45,000 employees in Russia, while preserving the group’s performance and our ability to return to the country in the future, in a different context.”
The agreement, which Renault said would cost the company an estimated € 2.2 billion (U.S. $ 2.29 billion), includes an option for the group to buy back its interest in Avtovaz for 6 years. Avtovaz is Russia’s largest carmaker and makes the country’s popular Lada brand.
In March 2022, Renault announced it was suspending operations at its Moscow factory after the President of Ukraine – Volodymyr Zelensky called on Renault and other French companies to leave Russia.
