‘They Have Stolen Our Business’: When You Leave Russia, Putin Sets the Terms
Western companies that exited Russia immediately after the invasion of Ukraine suffered big losses. Two years later, it’s clear that was as good as it got. An excerpt from the new book Punishing Putin.
The Golden Arches come down from a former McDonald’s in the Russian town of Kingisepp in June 2022.
Photographer: Anton Vaganov/ReutersIn early March 2022, top executives of McDonald’s Corp. gathered for their annual meeting in Cascais, a chic coastal resort town in Portugal. Just days earlier, Vladimir Putin’s troops had invaded Ukraine, sparking a global public outcry. Horrified by the images of attacks on civilians across Ukraine, consumers quickly took to social media, threatening to boycott companies that remained in Russia. In a flurry of video calls and C-suite huddles, executives had to weigh the reputational risk of staying, and being seen to indirectly help fund the war, against the financial pain of relinquishing billions of dollars of investment. In the first week, a parade of global brands announced plans to withdraw, suspend operations or temporarily close stores in Russia, including oil major BP and consumer giants Ikea and Nike.
McDonald’s, perhaps the biggest symbol of American capitalism, initially carried on with business as usual. It had blazed the trail for countless other Western companies in Russia since opening its first restaurant in Moscow in 1990 in what was a powerful sign of the easing of Cold War tensions. In the days after the invasion, McDonald’s Chief Executive Officer Chris Kempczinski temporarily shut the company’s restaurants in Ukraine because of security concerns but kept its Russian operations going.