News / Europe

Businesses Wonder Who's Next After Russia Targets McDonald's

People walk past a closed McDonald's restaurant, one of four temporarily closed by the state food safety watchdog in Moscow, August 21, 2014
People walk past a closed McDonald's restaurant, one of four temporarily closed by the state food safety watchdog in Moscow, August 21, 2014
Reuters

Russia said on Thursday it was investigating dozens of McDonald's restaurants, in what many businessmen said was retaliation for Western sanctions over Ukraine they fear could spread to other symbols of Western capitalism.

Russia's food safety watchdog said it was looking at possible breaches of sanitary rules at McDonald's, but many in the business community said it was a reflection of the deterioration in relations between Russia and the West over Ukraine, where pro-Russian separatists in the east of the country are fighting against government forces.

“Obviously, it's driven by the political issues surrounding Ukraine,” said Alexis Rodzianko, President and CEO of the American Chamber of Commerce in Russia.

“The question on my mind is: Is this going to be a knock on the door, or is this going to be the beginning of a campaign?”

Russia earlier this month slapped bans on Western food imports after Washington and Brussels imposed economic sanctions in response to Moscow's annexation of Ukraine's Crimea region and its backing of the separatists.

In a sign of growing frustration at the threat to trade, several mid-tier Russian businessmen signed off on a letter by British entrepreneur Richard Branson calling on politicians to stop the conflict.

“We, as business leaders from Russia, Ukraine and the rest of the world, urge our governments to work together to ensure we do not regress into the Cold War misery of the past,” the letter said.

McDonald's, which opened its first store in Russia in the dying days of the Soviet Union in 1990, is a very visible symbol of American capitalism in Russia, where it now has 438 branches.

The food safety watchdog ordered the closure of four of its restaurants in Moscow on Wednesday, including that first Russian branch, which is the busiest in the firm's global network.

The watchdog said on Thursday it was starting unscheduled checks in several Russian regions, including Sverdlovsk and Tatarstan in the Urals, the central Voronezh region and the region around the capital.

“We are aware of what is going on. We have always been and are now open to any checks,” a McDonald's Russia spokeswoman said.

Vulnerable businesses

So far no other prominent Western brand has reported coming under extra scrutiny from the Russian authorities, though there were Russian media reports that Jack Daniels was being investigated. The whiskey producer said it would challenge any accusations about its quality.

Amrest, the Warsaw-listed holder of the Russian franchises for several other iconic U.S. brands -- Starbucks, KFC, Pizza Hut and Burger King -- said last week it had experienced no problems and was doing well.

“We are monitoring closely recent geopolitical developments, to make sure we can adapt to changing conditions and minimize business risks,” said AmRest's chairman Henry McGovern during a teleconference with investors last week.

Nevertheless, big foreign brands are viewed as vulnerable.

French bank Societe Generale published on Thursday a research note saying companies generating most revenues in Russia and therefore most exposed to political risks were BP , British American Tobacco, BASF, Carlsberg, Coca-Cola, Alstom and E.ON.

Even some of McDonald's rivals came to its defense.

“This is a major blow to relations between the two countries,” Mikhail Goncharov, the owner of Russian fast-food chain Teremok, told RBC Daily, a newspaper.

“Even the Soviet Union was maintaining those relations because the first McDonald's opened during the USSR times, and PepsiCo factories continued to function regardless of political crises,” he added.

Since McDonald's first broke into Russia, it has for many Russian consumers been overshadowed by hundreds of swanky French and Japanese restaurants in the Russian capital, but it remains a powerful symbol, and therefore a prominent target.

On Thursday, outside the shuttered restaurant on Moscow's Pushkin Square, the closure stirred patriotic sentiment among some people.

“They occasionally kick us with different sanctions. Why can't we do something in return? Moreover, McDonald's is such a symbol of everything Western, I think it is a good symbolic step that shows that we have some teeth,” said Ivan. 

You May Like

Video One Year After Thai Coup, No End in Sight for Military Rule

Since carrying out the May 22, 2014 coup, the general has retired from the military but is still firmly in charge More

Goodbye, New York

This is what the fastest-growing big cities in America have in common More

Job-Seeking Bangladeshis Risk Lives to Find Work

The number of Bangladeshi migrants on smugglers’ boats bound for Southeast Asian countries has soared in the past two years More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs