Following Russia’s military invasion of Ukraine in March 2022, certain countries, including the United States, the European Union, and a number of other Western nations, decided to impose additional sanctions, including restrictions on Russia’s Central Bank, a total ban on the export of certain technologies, and even the exclusion of some Russian banks from the international payments system. Following Russia’s invasion of Ukraine, major global brands have continued to withdraw from the country. Despite the fact that this list is growing by the day, many major American corporations remain in Russia. Despite intense political pressure and consumer backlash to leave Russia, these companies continue to operate there. The majority of these brands have valid reasons for continuing to operate in Russia.
JOHNSON & JOHNSON
Johnson & Johnson is one of the companies that will not cease operations in Russia because “people will die or suffer severe consequences,” according to Chief Financial Officer Joseph Wolk in an interview with The Wall Street Journal.
They will provide lodging and financial assistance, as well as medical products such as hygiene kits, health packs, and other medical supplies. Along with the corporate matching programme Global Giving Ukraine Crisis Relief Fund, the company will donate $5 million to the International Federation of Red Cross and Red Crescent. They will also continue to collaborate with International Health Partners, Americares, Direct Relief, IFRC, Save the Children, and UNICEF by providing them with access to the company’s supply chain network.
HILTON
All 26 Hilton hotels in Russia are still open and operational. Hilton, like other hotel chains, has halted all new investments and future hotel openings in Russia; no new Hilton hotels will be built in the near future. According to The Street, this is a significant step for both international hotel chains and American commercial real estate companies. A significant amount of money is invested in international real estate development projects, so a decision to discontinue already-running investment projects could indicate that company decision makers believe this conflict will last for a long time.
MONDELĒZ INTERNATIONAL
The company that owns brands such as Oreo, Ritz, Cadbury, and Toblerone has drastically reduced its operations in Russia, but it has not ceased sales in the country. According to Ally Marotti of Crain’s Chicago Business, the company has ceased its import and export business with Russia, but will continue to provide basic food to Russian citizens because leaving them without necessities would be unethical. The company is assisting its employees, as well as their friends and families, in fleeing Ukraine. The company’s spokesperson stated that the company is offering its facilities in neighbouring countries as shelters for Ukrainian refugees, but they did not specify which facilities or where they are located.
MARRIOTT INTERNATIONAL
Many international hotel chains have found themselves in a difficult situation when it comes to the Russian market, as many of them operate on the basis of franchise business contracts, where the actual premises, such as hotels, are owned by third parties rather than the company itself.
According to Marriott International CEO Tony Capuano, the company’s annual Russian revenue, derived from the 28 Marriott International hotels in the country, is “not particularly significant,” accounting for less than 1% of the company’s annual revenues, according to Sam Lounsberry for Crain’s Chicago Business.
In light of this financial reality, the hotel chain closed its corporate office in Moscow overnight but will keep its hotels open throughout the country.
HYATT
Another hotel chain, Hyatt, has ceased all future operations in Russia but is continuing to operate its existing hotels. It is unknown who owns the five Hyatt-managed hotels in the country, but according to former Russian resident and hospitality industry attorney Scott Antel, who spoke to Crain’s Chicago Business, most hotels in Russia are owned by Russian legal entities and investors. While Hyatt will face legal issues with the US government if it continues to manage the hotels under the Hyatt name, people will face real issues if Hyatt removes its name and management, leaving many people unemployed.
PEPSICO
According to PepsiCo CEO Ramon Laguarta, the company that “helped create common ground between the United States and the Soviet Union” during the Cold War will suspend all soda drink sales — no one in Russia will drink Pepsi-Cola, 7Up, or Mirinda anymore. The company will “remain true to the humanitarian aspect of their business” and continue to sell essential items such as milk, baby formula, and baby food. They will also continue to conduct business with 20,000 associates and 40,000 agricultural workers in Russia who are part of the company’s supply chain.
MARS INC.
The company has billions of dollars in production facilities in Russia and will not cease production. Many of Mars Inc.’s popular pet food brands, including Whiskas, Pedigree, and others, are manufactured in Russia. According to Reuters, the company increased investments in one of the country’s five factories in 2018, after completing their Rostov Oblast plant — “one of Mars’ biggest investment projects in Russia” — the previous year. According to All About Feed, they will continue their expansion plans through 2021, investing more in the Rostov Oblast plant and increasing production by an additional 60%.
