A new cold war is about to start and the first shot heard round the world is a Burger Royale strike in Crimea. In retaliation Russia is proposing to close all McD outlets in the Father-land.
“Due to operational
reasons beyond our control, McDonald’s has taken the decision to
temporarily close our three restaurants in Simferopol, Sevastopol and
Yalta,” a spokeswoman said. The Crimean outlets are not franchises, but owned and operated by McDonald’s itself.
Economic relations between Russia and Ukraine have worsened since
Russia annexed Crimea last month in response to the ousting of
Russian-backed president Viktor Yanukovich after months of street
protests in Kiev.
Targeted sanctions imposed on a number of
prominent Russians by the United States and the European Union have
alarmed some foreign investors.
Russia raised the price it
charges Ukraine for gas on Thursday for the second time this week,
almost doubling it in three days by cancelling previous discounts. While
that may hurt Russian sellers, it piles pressure on a Ukraine teetering
on the brink of bankruptcy.
Russian riot police last month took control of a factory belonging to a
Ukrainian confectionery magnate in the city of Lipetsk as part of an
investigation into the company’s affairs, the Ukrainian government has
Ukraine this week temporarily banned seven Russian food companies from selling some of their products on Ukrainian territory.
McDonald’s said it hoped to resume work as soon as possible but said it
would help relocate staff to work in mainland Ukraine, signaling it did
not expect its Crimean businesses to reopen in the near future.
The company’s decision was welcomed by the deputy speaker of the
Russian parliament, Vladimir Zhirinovsky, known for his anti-Western
rhetoric, who demanded that McDonald’s pull its business out of Russia
entirely. “It would be good if they closed here too … if they
disappeared for good. Pepsi-Cola would be next,” Russian media quoted
Zhirinovsky as saying.
McDonald’s, which currently operates more than 400
restaurants in Russia, was the first international fast-food chain to
tap the Russian market when it opened in Moscow’s Pushkin Square before
the collapse of the Soviet Union. That branch had the highest sales and served the most customers of any McDonald’s outlet in 2012.
A Russian backlash again McDonald’s products would have a significant
impact on company profits. McDonald’s sees Russia as one of its top
seven major markets outside the United States and Canada, according to
its 2013 annual report.
However Russian moves to shun
McDonald’s burgers could easily backfire, according to Russian newswire
RBK, which detailed Russian food suppliers to McDonald’s that would
suffer as a result.