News / Europe

    Russia Shuts 4 McDonald's Restaurants Amid Ukraine Tensions

    People sit outside a closed McDonald's restaurant in Moscow, Aug. 20, 2014.
    People sit outside a closed McDonald's restaurant in Moscow, Aug. 20, 2014.
    Reuters

    Russia ordered the temporary closure of four McDonald's restaurants in Moscow on Wednesday, a decision it said was over sanitary violations but which comes against a backdrop of worsening U.S.-Russian ties over Ukraine.

    The four restaurants ordered to suspend operations by the state food safety watchdog included the first ever McDonald's in Russia, which opened in the last days of the Soviet Union, and which the company says is its most frequented in the world.

    On Wednesday evening, the lights were off inside the restaurant - usually crammed with diners - and a sign on the door said it was shut “for technical reasons.”

    McDonald's Corp shares were down 0.3 percent at 1911 GMT (3:11 p.m. EDT), against the backdrop of a slightly firmer U.S. stock market.

    The watchdog, known in Russia as Rospotrebnadzor, said in a statement inspectors had found numerous sanitary violations. A source at the watchdog said it had sealed off parts of the restaurants' premises.

    Asked if the decision was a retaliation for the United States and other countries imposing economic sanctions on Moscow over the crisis in Ukraine, the source declined to comment and referred to the statement about sanitary violations.

    McDonald's head office in Illinois said in a statement: “We are closely studying the subject of the documents to define what should be done to re-open the restaurants as soon as possible.”

    Russia's first McDonald's opened on Moscow's Pushkin Square in 1990, when it was viewed as a sign that, under reformist Soviet leader Mikhail Gorbachev, Cold War tensions with the United States were starting to thaw.

    It was hugely popular with Russians; long queues formed outside and some people even had their wedding receptions there.

    “We have many happy memories of this place,” said a man who gave his name as Vadim. He had come with his wife Natalya to celebrate his 77th birthday at McDonald's, but was forced instead to buy a coffee elsewhere and drink it seated at a table outside the shuttered restaurant.

    Asked about the allegations of sanitary violations, he said: “It's a lie. We've been here since it first opened and never got ill once.”

    Another of the restaurants closed on the orders of the food safety watchdog is on Moscow's Manezh Square, under the walls of the Kremlin where President Vladimir Putin has his offices.

    No to Big Mac?

    McDonald's, seen as a symbol of the U.S. global expansion, has been criticized by Russian nationalists.

    Prominent politician Vladimir Zhirinovsky called for the chain to be shut down across Russia after the company withdrew from Crimea peninsula in April following Moscow's annexation of the region from Ukraine.

    Some consumers share that view.

    “I am for McDonald's being wiped from the face of the Earth,” said Vladimir Zolotsev, 20, studying to be a pianist, who was near the Pushkin Square restaurant.

    It became clear last month that McDonald's was under heightened scrutiny from the Russian state, when the watchdog said it had identified violations in product quality that raised questions about the safety of food across the chain.

    Foreign food producers who have fallen foul of the watchdog in the past have accused it of acting in the political interests of the Kremlin, an allegation it denies.

    The watchdog banned Georgian wine as Tbilisi strengthened ties with Washington and spirits from Moldova after the former Soviet republic boosted its drive to partner with the European Union.

    Janusz Piechocinski, the deputy prime minister of Poland, said last month that a decision by the watchdog to ban most Polish fruit and vegetable imports was an act of “political repression” by the Kremlin.

    McDonald's operates 438 restaurants in Russia and sees the country as one of its top seven major markets outside the United States and Canada, according to its 2013 annual report.

    “Russia has been a very bright spot for McDonald's,” said Mark Kalinowski, a restaurant analyst for Janney Capital Markets.

    Russia accounts for roughly 10 percent of McDonald's operating profit from Europe, which contributes about one-third of fast-food chain's overall operating profit, Kalinowski said.

    Earlier this month Russia banned all meat, fish, dairy, fruit and vegetable imports from the United States, the European Union, Norway, Canada, and Australia for one year in retaliation for the sanctions imposed by these countries over Ukraine.

    However, some of these restrictions were eased on Wednesday to allow the import of some items that are useful to Russia's own food and agriculture industries, such as vegetables for planting and hatchlings of salmon and trout.

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