GOING BACK TO ITS ROOTS
Russia proposes nationalising
foreign-owned factories that shut
operations
COPENHAGEN (Reuters) -A senior member of Russia's ruling party has proposed nationalising foreign-owned factories that shut down operations in the country over what the Kremlin calls a special military operation in Ukraine.
Several foreign companies including Ford and Nike have announced temporary shutdowns of stores and factories in Russia in order to put pressure on the Kremlin to stop its invasion of neighbouring Ukraine and as their supply chains are disrupted.
In a statement published on Monday evening on the United Russia website, the secretary of the ruling party's general council Andrei Turchak said shutting operations was a "war" against the citizens of Russia.
The statement mentioned Finnish privately owned food companies Fazer, Valio and Paulig as the latest to announce closures in Russia.
"United Russia proposes nationalising production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine," Turchak said.
"This is an extreme measure, but we will not tolerate being stabbed in the back, and we will protect our people. This is a real war, not against Russia as a whole, but against our citizens," he said.
"We will take tough retaliatory measures, acting in accordance with the laws of war," Turchak said.
Paulig Chief Executive told Reuters in an email this would not change its plans to withdraw from Russia. Fazer and Valio did not wish to comment when contacted by Reuters.
Fazer, which makes chocolate, bread and pastries, has three bakeries in St Petersburg and one in Moscow, employing around 2,300 people.
Valio has a cheese factory and employs 400 people in Russia, and Paulig has a coffee roastery and employs 200 people in the country.
Last week, non-NATO member Finland, which shares a border with Russia, agreed to strengthen security ties with the United States as it nervously watches Russia's invasion of Ukraine.
(Reporting by Jacob Gronholt-Pedersen; additional reporting by Essi Lehto, editing by Ed Osmond, Kirsten Donovan and Lincoln Feast.)
Tobacco group BAT suspends Russia capital investments, scales back marketing
Signage is seen at the London offices of British American Tobacco, in London, Britain
Wed, March 9, 2022
By Richa Naidu
LONDON (Reuters) - Camel and Lucky Strike cigarette maker British American Tobacco Plc said on Wednesday its business in Russia continued to operate, but that it had suspended all planned capital investment in the country following the Ukraine invasion.
BAT, which has 2,500 workers in Russia and major local manufacturing operations, also said it was "scaling our business activities appropriate to the current situation, including rationalising our marketing activities."
The Ukraine crisis has put pressure on multinational companies to take action, with a growing list of consumer products manufacturers distancing themselves from Russia this week.
BAT's announcement comes hours after Philip Morris International Inc suspended its planned investments in Russia and said it would scale down manufacturing in the country. Smaller London-listed rival Imperial Brands also said on Wednesday that it had paused operations in Russia.
Nestle, tobacco groups, gamemaker Sony join move away from Russia
Nestle logo is pictured on the door of the supermarket of Nestle headquarters in Vevey
Wed, March 9, 2022
(Reuters) - Nestle, Philip Morris and video gamemaker Sony joined the list of multinationals stepping back from Russia on Wednesday as pressure mounts from consumers in the West to take a stand against the invasion of Ukraine.
Nestle, the world's biggest packaged foods group, and Mondeleze International, followed actions by rivals Procter & Gamble and Unilever in halting investment in Russia.
But the four companies will continue providing essentials, with Mondelez aiming to help to maintain "continuity" of the Russian food supply.
Similarly, while cigarette maker Imperial Brands suspended operations in Russia, rival Philip Morris only said it would scale down manufacturing, and Camel maker British American Tobacco Plc said its business in Russia continued to operate, even though it had suspended capital investment.
Sony, whose movie studio has already stopped releases in Russia, took additional action on Wednesday, saying its PlayStation gaming unit would stop shipments and operations in Russia. "Sony Interactive Entertainment joins the global community in calling for peace in Ukraine," it said.
Many businesses face difficulty working in Russia due to sanctions and a lack of shipping, in addition to pressure from consumers and investors, and describe ending work in Russia in more practical terms, without blaming the Russian government for attacking Ukraine.
Heavy equipment maker Deere & Co, saying it was "deeply saddened by the significant escalation of events in Ukraine," announced it had ended shipments to Russia two weeks ago, and subsequently to Belarus, and said it would follow U.S. and international sanctions. Caterpillar Inc said it was suspending business as supply chain disruptions and sanctions made business difficult and 3M followed suit after reassessing its business in Russia.
Still, pressure in the West is building.
A Rio Tinto executive early in the day said the miner was working to maintain supplies of Russian fuel to its Mongolian copper mine, but the company later announced it was terminating all commercial relationships with Russian businesses.
Hotel companies Hilton Worldwide Holdings and Hyatt Hotels Corp said they would suspend development in Russia.
Coca-Cola Co and McDonald's Corp halted sales in Russia on Tuesday in symbolically potent gestures. A senior member of the Russian ruling party has warned that foreign firms that close down could end up having their operations nationalised.
McDonald's said the temporary closure of its 847 stores in the country would cost it $50 million a month.
Sportswear firm Adidas also quantified the cost of scaling back its operations, saying it would take a hit to sales of up to 250 million euros ($277 million).
Yum Brands Inc, parent of fried chicken giant KFC, said it was pausing investments in Russia, a market that helped it achieve record development last year.
Carlsberg said it was suspending Russian brewing of its namesake brand of beer while keeping its Russian Baltika brand operating.
"We feel a moral obligation to our Russian colleagues who are an integral part of Carlsberg, and who are not responsible for the actions of the Government," Carlsberg said, adding it was withdrawing financial guidance for the year.
E-commerce company Shopify Inc joined the crowd, saying it would suspend Russian operations and collect no fees from Ukrainian merchants, citing millions of Ukrainian refugees needing support.
'LAWS OF WAR'
In response to the exodus, Andrei Turchak, secretary of the ruling United Russia party's general council, warned Moscow might nationalise idled foreign assets.
"United Russia proposes nationalising production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine," Turchak wrote in a statement published on the party's website on Monday.
The statement named Finnish privately owned food companies Fazer, Valio and Paulig as the latest to announce closures.
"We will take tough retaliatory measures, acting in accordance with the laws of war," Turchak said.
SANCTIONS
Moscow, which calls its invasion of Ukraine a "special military operation," has been hit by sweeping Western sanctions that have choked trade, led to the collapse of the rouble and further isolated the country.
Banks and billionaires have also been targeted, with the European Commission preparing new sanctions targeting additional Russian oligarchs and politicians, and three Belarusian banks, Reuters reported.
While the war in Ukraine and the sanctions have bolstered prices for commodities that Russia exports such as oil, natural gas and titanium, those sanctions have largely barred Moscow from taking advantage of the high prices.
On Tuesday the United States banned Russian oil imports.
U.S. oilfield services company Schlumberger, which derives about 5% of its revenue from Russia, said the ongoing conflict would likely hurt results this quarter.
Global commodities trader Trafigura Group raised a $1.2 billion revolving credit facility from banks to help address soaring energy and commodity prices.
Norway's Yara, a top fertiliser maker, said on Wednesday it would curtail ammonia and urea output in Italy and France due to surging gas prices.
($1 = 0.9037 euro)
(Reporting by Reuters bureaux, Jacob Gronholt-Pedersen, Rithika Krishna, Aishwarya Nair and Mrinalika Roy in Bengaluru, Dawn Chmielewski in Los Angeles, Bianca Flowers in Chicago, Denny Thomas in Toronto and Ernest Scheyder in Houston; Writing by Sayantani Ghosh, Paul Sandle and Peter Henderson; Editing by Jason Neely, Jane Merriman, Matthew Lewis and Lincoln Feast.)
Andy Wells
·Freelance Writer
Wed, March 9, 2022
The Ukraine crisis has seen many major brands suspend operation in Russia – including several fast food chains.
Following widespread criticism, Coca-Cola, Starbucks, and McDonald’s have joined others by halting business in Russia in response to its invasion of Ukraine.
The three major brands all announced the move within hours of each other on Tuesday.
In a statement posted to its website, Starbucks announced it is “suspending all business activity in Russia”.
Dunkin' Donuts have stores still open in Russia. (Getty)
Papa John's stories remain open in Russia. (Getty)
Starbucks chief executive Kevin Johnson said in a statement posted on the website that the company condemns “the horrific attacks on Ukraine by Russia and our hearts go out to all those affected”.
It came just hours after McDonald’s announced the temporary closure of all restaurants in Russia in 850 different communities.
However, some fast food chains with stores in Russia appear to still be operating, with no immediate mention of halting business on company websites.
They are:
Burger King – 550 stores
Domino’s Pizza – 121 stores as of 2017
Papa John’s – 197 stores as of 2019
Subway – Around 600 stores
Dunkin’ Donuts – Around 20 stores
McDonald's has announced the closure of all its restaurants in Russia. (Getty)
KFC and Pizza Hut also have stores open in Russia but parent company Yum Brands Inc said they were finalising an agreement to suspend all Pizza Hut restaurant operations in Russia.
Seventy company-owned KFC stores are also set to close, while investment in Russia is set to be paused.
However, with at least 1,000 KFC stores in Russia, many will remain open but the majority are owned and operated independently through franchise agreements, meaning the company has significantly less control on closing those stores.
Yum Brands said in a statement: "Like so many across the world, we are shocked and saddened by the tragic events unfolding in Ukraine.
"Yum Brands has suspended all investment and restaurant development in Russia while we continue to assess additional options."
A man walks past a Domino's Pizza restaurant in Moscow, Russia. (Reuters)
Many KFC stores in Russia are independently owned and remain open. (Kirill Kukhmar\TASS via Getty)
Burger King stores in Russia remain open due to franchise issues. (Getty)
Similarly, Restaurant Brands International Inc, the parent company of Burger King, said that their more than 800 restaurants remain open in Russia as they are owned and operated by local franchisees.
A spokesperson for the company told Yahoo News UK that Burger King has committed $3m to immediately support Ukrainian refugees.
They added: “We are watching the attack on Ukraine and its people with horror and are focusing our efforts in the region on contributing to the safety of Ukrainians seeking shelter and security for their families.”
An apartment building damaged after shelling the day before in Ukraine's second-biggest city of Kharkiv. (Getty)
Domino’s Pizza, Papa John’s, Subway and Dunkin’ Donuts have all been contacted for comment.
In an article shared to the McDonald’s website on Tuesday – which was originally sent to employees and franchisees by email – CEO Chris Kempczinski said: “The conflict in Ukraine and the humanitarian crisis in Europe has caused unspeakable suffering to innocent people.”
Kempczinski said it would continue to pay the 62,000 employees in Russia although the company “cannot ignore the needless human suffering unfolding in Ukraine”.
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