Coca-Cola and McDonald’s have drawn the ire of online commentators for failing to speak out about the attacks by Russia and the invasion of Ukraine, and continuing to operate in Russia.
Across the board, pressure has been growing for commercial entities, especially giants like the aforementioned companies, to pull out of the region in a show of support for the people of Ukraine.
Some well-known firms, like Netflix, Levis and H&M, have already halted sales or stopped servicing customers in Russia entirely.
BBC, following online calls to boycott Coca-Cola and McDonald’s over their perceived lack of action, reached out to the food and beverage giants for comment on the issue, but failed to receive a response.
Over the weekend, and spilling over into Monday, #BoycottMcDonalds and #BoycottCocaCola were trending on Twitter.
Prominent investor Deborah Maeden, hailing from Dragon’s Den, joined the online criticism, urging people to stop drinking Coca-Cola for refusing to withdraw from Russia.
They are not the only major food and beverage brands to receive criticism for failing to speak up, however, with brands such as KFC, Pepsi, Starbucks and Burger King facing similar calls to close outlets or stop servicing the region.
Currently, McDonald’s operates 847 stores in Russia, with the company owning the majority of these outlets, rather than the franchise model typically operated. For instance, locally, the McDonald’s franchise is owned and operated by Premier Capital, a subsidiary of Hili Ventures.
Last year, KFC reached a milestone of 1,000 restaurants in Russia, however it is understood that most of these are operated by licence-holders / franchisees.
Typically, franchise owners are able to take a decision on whether to shut chains down based on agreement terms they have with the main franchise, like KFC and Starbucks.
BBC quotes Kathleen Brooks, director at Minerva Analysis, who highlights the difficulties and complication with certain companies leaving Russia quickly.
She said that McDonald’s and Coca-Cola were “very complicated businesses”, with Coca-Cola in particular having an “incredibly complicated structure” with bottling plants in Russia.
“I don’t think it’s as simple as saying you can just pull out of Russia. These are complicated businesses and there’s a lot to consider, but right now the reputation risk could really hit their share prices so they may have no choice going forward.”
Indeed, the complex structures of Coca-Cola’s bottling operations can be understood from the local context alone. Malta’s General Soft Drinks Co produces and bottles the popular soft-drink on the island, as an independent Coca-Cola bottler as well as the sole licensed bottler of The Coca Cola Company in Malta.
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