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Daily Mirror
Daily Mirror
Business
Emma Munbodh

Subway, PepsiCo and more firms still trading in Russia 21 days since Ukraine war began

Three weeks on from Russian's first attack on Ukraine, dozens of Western businesses continue to trade in the country.

As Apple, Samsung, Mastercard and more global corporations cut ties with Putin's economy, some businesses are still open to the public, as three million people flee their homes in Ukraine.

Since Russia's invasion began on February 24, the country has suffered widespread damages and loss of life amid a major bombing campaign.

Ukrainian cities face shortages of food, water, heat, and medicine - with thousands of British people opening up their homes to Ukrainian refugees.

Countries have retaliated by imposing sanctions on Russia and oligarchs such as Roman Abramovich, while large companies like Disney, Starbucks, McDonald's, and Coca-Cola have suspended business in the country. The sanctions hope to freeze Russia's economy and its funding of the war.

However, despite Western sanctions, Russian President Vladimir Putin hasn't shown any signs of calling off the attack anytime soon.

Meanwhile, dozens of companies that remain in Russia say it's difficult to leave.

Marks and Spencer, Burger King, and hotel groups Marriott and Accor are understood to be restricted by complex franchise deals that prevent them from withdrawing.

These are the firms that are continuing to trade in the country.

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Subway and Burger King have both said they don’t actually own any of their Russian stores, which are owned and operated by local franchisees (Getty Images Europe)

Subway

Subway’s 446 local franchises in Russia are still in business, but the US sandwich chain says it is donating its profits from Russia to humanitarian causes.

The company explained in a statement: "Our thoughts are with the people of Ukraine, and we are committed to supporting those impacted by the tragic events in the region.

"In addition to working with our franchisees across Europe to provide meals to refugees, we will redirect any profits from operations in Russia to humanitarian efforts supporting Ukrainians who have been affected by the war.

"Our restaurants in Russia are all independently owned and operated by local franchisees and managed by an independent master franchisee.

"We don’t directly control these independent franchisees and their restaurants."

PepsiCo

Pepsi owner PepsiCo has suspended the sale of Pepsi, 7Up and Mirinda in Russia, as well as pulling out of advertising campaigns, however it is still selling essential products to Russian citizens.

"As a food and beverage company, now more than ever we must stay true to the humanitarian aspect of our business," the soft drink giants said in a statement.

"That means we have a responsibility to continue to offer our other products in Russia, including daily essentials such as milk and other dairy offerings, baby formula and baby food.

"By continuing to operate, we will also continue to support the livelihoods of our 20,000 Russian associates and the 40,000 Russian agricultural workers in our supply chain as they face significant challenges and uncertainty ahead."

Pepsi’s suspension of certain products is said to be hugely significant – as it was one of the few Western brands available in Russia during the days of the Soviet Union.

Unilever

Unilever continues to supply essential goods to the Russian market, however all imports and exports of non-essential products in and out of the country have been suspended.

"We have suspended all imports and exports of our products into and out of Russia, and we will stop all media and advertising spend. We will not invest any further capital into the country nor will we profit from our presence in Russia," the company said in a statement.

"We will continue to supply our everyday essential food and hygiene products made in Russia to people in the country. We will keep this under close review."

Burger King

A corporate exodus is underway, but some firms are still in business because of their legal arrangements (Alamy Stock Photo)

Burger King’s 800 branches remain open, with the company blaming complex legal arrangements for its decision to keep trading.

The company has, however, halted corporate support for all franchised restaurants in the country.

It comes as rival fast-food chains KFC and McDonald's shuttered shops across the country.

"BK Russia is a standalone business owned and operated by our franchisees in the country," parent company Restaurant Brands International said in a statement.

"We have long-standing legal agreements that are not easily changeable."

The company has however said it will be donating profits from its branches in Russia towards efforts to support Ukrainian refugees.

Mondelez

Cadbury-owner Mondelez, which also owns Oreo, Philadelphia, Toblerone and Alpen – will continue to supply basic products to the Russian market.

However they have announced they are cutting back on their operations there, with CEO Dirk Van de Put, saying: "We are scaling back all non-essential activities in Russia while helping maintain continuity of the food supply during the challenging times ahead.

"We will focus our operation on basic offerings, discontinue all new capital investments and suspend our advertising media spending.

"We recognise this is a highly dynamic and very concerning situation that we will continue to assess and adjust as needed."

Nestle

Nestle said that the company had "halted all our advertising activities in Russia and we have decided to suspend all capital investment in the country.

"As a food company and employer, we also have a responsibility toward the people in Russia and our more than 7,000 employees – most of whom are locals.

We will continue to ensure a reliable supply of safe and essential food products to the local people in the country."

Mars

Two weeks after Russia invaded Ukraine, Mars has said it will "scale back" its operations in Russia, but said it will still continue with its "essential role" to feed "people and pets".

The packaged foods company added that any profits it makes from Russia "will be used for humanitarian causes.

"We have suspended new investments in Russia and will not import or export our products in or out of Russia. Our social media and advertising activity in Russia and Belarus will remain suspended."

A statement on Mars' website said the company "would not hesitate" to take further action if needed and that their "hearts are broken by this terrible war".

The company said it will increase donations to humanitarian causes by £7.6million, in addition to the £1.5million committed to affected people and pets last week.

Marks & Spencer

M&S has pledged more than £1.5million to support refugees and is donating 20,000 coats and thermals but its 48 shops are still open in Russia.

That's because Marks and Spencer stores have been operated by a Turkish company called FiBA, which has held the rights to sell the retailer's products across Eastern Europe, since 1999.

The retail giant has, however, suspended shipments of its goods to FiBA in response to the war.

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