American Products, Russian Consumers

 

"Over the years, McDonald's has become, in the eyes of Russians, associated with youth and low-level managers. Long forgotten was its symbolism -- of the Western world arriving in the USSR. The first McDonald's in Russia opened in Moscow in January 1990, more than a year before the Soviet Union collapsed in December 1991. When McDonald's shuttered this week, it signaled the end of the West in authoritarian Russia. The days of our merry global consumption were over, and it pointed to darker ones ahead. Of course, compared to the horror happening in Ukraine, the closure of brands looks insignificant. They are just symbols of the economic collapse in Russia, provoked by the invasion -- and subsequent sanctions." (Words of Andrei Kolesnikov, a Russian writer) 

 

 No More Coca-Cola

S9

You can't get a coke any more in Russia. The Coca-Cola 
company has suspended operations there to express its view of the war. 

After several days of public opinion in the US that pressured the Coca-Cola Company to close its Russian operations, they announced: "Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine. We will continue to monitor and assess the situation as circumstances evolve." (Coca-Cola Company Statement March 8, 2022)

McDonald's Has Closed 850 Russian Restaurants

In the 1990s, when McDonald's was just establishing its operations in Russia, there was a theory called
the "Golden Arches Theory of Conflict Prevention." According to this theory, no two countries with McDonald's restaurants had ever been at war with each other, because their economic interests were aligned to give them an incentive for peace. "The admittedly semi-serious theory offered an easy shorthand for a broader belief at the time that common economic interests and increasing global connectedness would supersede the causes of conflict between nations," wrote Adam Chandler in the Washington Post a few days ago. (link)

The theory was invented by New York Times columnist Thomas Friedman. Soon after he published it, Chandler pointed out, several wars broke out that disproved it. "Today, one trivial side effect of Russia’s ongoing invasion of Ukraine is that it has brought the theory back for examination once again. And while Friedman’s premise is as wrong as it always has been, it’s also increasingly clear that it misunderstood something fundamental about the global order — and the role of the United States in it. What is implicit in the Golden Arches Theory of Conflict Prevention is the idea that the economic system upholding it would be American-led. This, after all, is why McDonald’s, the quintessential American export, is so important."

McDonald's, which was experiencing significant public pressure from American and European customers to close in Russia, stated this: "our values mean we cannot ignore the needless human suffering unfolding in Ukraine ... McDonald’s has decided to temporarily close all our restaurants in Russia and pause all operations in the market. ... As we move forward, McDonald’s will continue to assess the situation and determine if any additional measures are required. At this juncture, it’s impossible to predict when we might be able to reopen our restaurants in Russia. We are experiencing disruptions to our supply chain along with other operational impacts. We will also closely monitor the humanitarian situation." (McDonald's statement, March 8, 2022)

This did not prevent war?

Another Drink You Can't Get Today in Russia

Like Coke and McDonald's, Starbucks has suspended operations in Russia and closed 130 coffee shops.

Maybe Starbucks, McDonald's, and Coke couldn't change fundamental Russian values?

Will this pressure have any effect?

Since Russia attacked Ukraine, at least 300 other Western corporations have closed or limited their operations in Russia. International banking operations, particularly, have shut out Russian banking activity, including access to Russia's government funds in other currencies. Product and service providers that have reduced or cancelled Russian commerce include several aircraft manufacturers (meaning no parts for most planes flying in Russia), Shell Oil, Ikea, Pizza Hut, L'Oreal luxury products, Ferrari and other automobile companies, Apple Computers, and Netflix. Visa and Mastercard have limited Russian charging privileges. AirB&B has suspended operations. Pharmaceutical companies, however, have so far expressed a sense of obligation to supply crucial medications to the Russians, and a few other companies like Mars and Nestle may still be doing business there.

Economic commentators have been explaining what these disruptions mean for the Russian economy and Russian consumers. The ruble, of course, has been in a severe decline since financial sanctions started at the beginning of the war, with implications for Russian businesses of all types. It’s a very complicated situation, obviously.

I hope for the sake of the Ukrainian people, that there's an end in sight, but I don't see it. It goes without saying that the suffering of the Ukrainians under siege is infinitely more painful than any impact from the sanctions against Russia. Humanitarian considerations motivate some of the choices of governments and corporations in determining sanctions against Russia. When attacking at least 9 hospitals and many people’s homes, the Russians didn’t seem to be hampered by any humanitarian considerations.

“Ukraine's national poet Taras Shevchenko with the smouldering remains of residential buildings in Borodyanka, northwest of Kyiv, in the background.“ — Tweet by Andrei Kolesnikov

Blog post by mae sander for mae food dot blogspot dot com.

Photos from a variety of websites.