Starbucks Reveals It’s Ditching Russia Over Putin’s Illegal War

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Starbucks is now among the latest large companies to reveal it’s leaving Russia in connection to Vladimir Putin’s ongoing war against Ukraine. The company operated in Russia for some 15 years ahead of its departure announcement.

The departure will entail an end to the licensing of the Starbucks brand to 130 locations across Russia. In the country, none of these locations are run by Starbucks itself, although the company appears closely connected to the functioning of these stores. “Starbucks said it will pay its nearly 2,000 Russian workers for six months and help them transition to new opportunities outside of the coffee chain,” as summarized Monday by CNBC. Income from the Russian Starbucks stores is less than one percent of the annual revenue brought in by Starbucks worldwide.

Starbucks shared a brief statement revealing the company decision. It previously suspended business operations in Russia shortly after the war began. “As we mentioned on March 8, we have suspended all business activity in Russia, including shipment of all Starbucks products. Starbucks has made the decision to exit and no longer have a brand presence in the market,” Starbucks said, in part. McDonald’s is also leaving Russia; unlike Starbucks, most of the McDonald’s locations in Russia are — or were — run by the company, not locals involved in a licensing arrangement. In 2021, Russian and Ukrainian revenue was some 9 percent of the total income brought in by McDonald’s, and across the first quarter of this year, the company said it lost $127 million from suspending both country’s operations.

Per CNBC, McDonald’s locations inside Russia are now getting sold for a private amount to a Siberian interest, who will run the restaurants under new branding. Up to this point, McDonald’s operated in Russia for over 30 years. “This was not an easy decision, nor will it be simple to execute given the size of our business and the current challenges of operating in Russia,” company CEO Chris Kempczinski said of the choice to leave. “But the end-state is clear. What makes this especially hard is the dedication of our McDonald’s employees and suppliers in Russia, whose commitment to the brand set a new standard for customer service in the region. We are inspired by their passion for McDonald’s and our customers, and we are forever grateful for their contributions.” In Russia, McDonald’s stores “employ more than 60,000 people in our restaurants, and we’ve cultivated from scratch a network of local suppliers who employ tens of thousands more,” he added. But these operations — which, like Starbucks, were apparently suspended — will not be continuing in their present form.

Interests around the world have sought to penalize Russia in connection to the war in Ukraine, and the Putin-led nation has become the most sanctioned country on the planet. Leaders in the G7 group of nations have pledged to “phase out” their countries’ dependencies on Russian energy. The U.S. — a member of that group — already announced a ban on Russian energy imports, but European nations more dependent on energy products from Russia weren’t in a position to so quickly announce such a wide-ranging move.