McDonald’s can’t hide

(McDonald’s have now announced they will stop trading in Russia stating “our values mean we cannot ignore the needless human suffering unfolding in Ukraine.” This article was written prior to this.)

The Ukrainian outlets of McDonald’s have distributed free food. Now closed their kitchens continue to be used to distribute ingredients and ready-made meals to the Ukrainian military, hospitals, and civilians.

McDonald’s Corporation however has yet to condemn the Russian act of war on the citizens of Ukraine. With brands such as Nike, Disney, H&M and Apple curtailing sales McDonald’s is becoming a stand-out exception in treating Russia as business as usual.

Businesses such as Nike, Disney, Unilever and H&M have made it very clear they stand with the Ukrainian people

McDonald’s attachment to Russia is long established. It was a pioneer western brand, gaining permission from the Communist Party to open in Moscow in 1990. The company now employs about 160,000 people in Russia, has localised sourcing and has claimed to be the largest taxpayer in the Russian food service industry. It has recently invested in expanding its presence and has more than 800 outlets.

Silence and history however does not guarantee a sustainable business in Russia. The company is increasingly vulnerable to an anti-American backlash. In 2014 Russian authorities ordered the temporary closure of four McDonald’s restaurants in Moscow citing sanitary violations against a backdrop of increasing US-Russian tension over Ukraine. This week New York state’s pension fund has challenged the likes of McDonald’s “to consider whether doing business in Russia is worth the risk during this extraordinarily volatile time.”

Putin’s brutal attacks on Ukraine and ensuing humanitarian crisis make silence impossible

With a sizeable number of staff, increasing restrictions on free speech and a franchise model action by McDonald’s will be problematic and painful. With reports that most of their Russian restaurants are owned by the company the ceasing of trading appears feasible if not easy. It is of course possible that shutdowns will ultimately be enforced by the Russian government anyway.

What is clear is that action combined with public condemnation of the war on Ukraine from McDonald’s would make a powerful statement to the Russian public. The brand would be missed by consumers and tax revenue reduced. The loss of an iconic capitalist pioneer would reaffirm the regression of Putin’s Russia.

As a former McDonald’s Russia MD observed “When you’re one of the largest American companies in the country, you can’t really hide.” Given it is simultaneously impossible to hide from recognising the horrific nature of Putin’s attack on innocent people McDonald’s needs to find a way to show their support and values.

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