By Denis Sheehan, Publisher, H&C News: Despite war in Ukraine, Coca Cola, McDonalds, and Pepsi remain operational in Russia.
This last few days have seen the evacuation of many of the world’s biggest brands from Russia, keen to protect their brand’s reputation. International sanctions having already made business untenable for some, others cite it as their moral obligation to do so. Many however remain, including Coca Cola, McDonalds, and Pepsi.
The cost of stopping trade
Russia’s largest foreign investor, BP announced last Monday exiting its 19.75% stake in Rosneft, the Russian state-controlled oil company. Rosneft accounts for circa 50% of BP’s oil and gas reserves, and the move out of Russia could lead to a $25 billion loss for BP.
Countless others have also exited, car makers BMW, GM, Toyota, Volvo, and a whole tranche of other global market leading brands across many different sectors including Apple, ExxonMobil, Harley-Davidson, and Nike.
The cost of not stopping trade
The decision to cut trade links with Russia and stand alongside Ukraine would seem to fit well with any school of international brand management.
The world is watching Russia invade Ukraine, war is underway, people are dying in their thousands, Russians and Ukrainians, but for some attempts to continue business preside over moral convictions.
Sky News is reporting today: The chief of New York state’s pension fund has singled out McDonald’s and Pepsi. Thomas DiNapoli, who controlls the $110 billion New York State Common Retirement Fund, told Reuters that companies “need to consider whether doing business in Russia is worth the risk during this extraordinarily volatile time”.
He added: “Russia’s unprovoked invasion of Ukraine and its highly unpredictable foreign policy are a threat to the global economy. We’re encouraging the companies we invest in to do a risk analysis and determine what is in the best interests of their company and their shareholders.”
Coca Cola for days has been on the wrong end of #BoycottCocaCola. A social media campaign that has activated billions of engagements and almost all negative. Examples can be seen on twitter as well as many other channels.
Where the humanitarian, political, and economic reverberations from the current war in Ukraine will end is hard to see. But consumers will remember actions and inactions for many years to come, making decisions to maintain business in Russia perhaps far more expensive that this year’s P&L will show.
Note: I view the current positions of Coca Cola, McDonalds, and Pepsi as 100% untenable, and expect all, one by one to reverse their decisions, so if you are reading this after its publishing date 5th March, please review our latest news section for updates.