Western companies still operating in Russia: Nestle, Marks and Spencer, Burger King trading decision explained

The Russian invasion of Ukraine led to tough and swift sanctions on the eastern European country from nations across the world.

Another consequence of this controversial action by President Vladimir Putin was the withdrawal of major Western companies in the Russian market.

Apple, Starbucks, McDonalds and Sony are among those to withdraw from the company.

However, not all major Western companies have suspended business in Russia.

Here are a list of the companies which are still operating in the country and their reasoning for doing so.

Nestlé

Food manufacturing company Nestlé made the decision to continue importing essential good to Russia, while pausing the import of non-essential good, such as Nespresso products.

In a statement, the company said: “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. Our diverse range of essential food products includes baby food and breakfast cereals. We have consistently stayed the course – also during difficult times – to serve the local people who need it the most.”

The Ukrainian government has since called on Nestlé to suspend all operation in the country to put pressure on the Russian government.

Ukrainian Prime Minister Denys Shmyhal said: “[I] talked to Nestlé CEO Mr Mark Schneider about the side effect of staying in [the] Russian market. Unfortunately, he shows no understanding. Paying taxes to the budget of a terrorist country means killing defenceless children and mothers,” Mr Shmyhal said.

He added: “[I] hope that Nestlé will change its mind soon.”

Marks & Spencer

British high street favourite Marks & Spencer do in fact have business in Russia, with 48 stores currently within the country.

However the situation is more complicated than it seems on the surface.

The 48 Russian stores are in fact franchises held by Turkish-owned company FiBA.

The business has held the rights to the M&S brand in Russia since 1999 and is able to sell M&S branded products also.

Marks & Spencers confirmed that it would not be able to close the Russian store without causing legal issues.

However bosses did confirm that any profits made from the Russian stores will go to helping Ukrainian refugees.

A statement read: “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.”

Burger King

While McDonald’s is often associated with the rise in capitalism in Russia in the 90s, it is not the only fast food restaurant which operates in the country.

Burger King launched its first Russian store in 2010 and has grown to have around 800 restaurants in the country.

While pressure has lead to the company attempting to close it’s Russian restaurants, the owners of the fast food chain have hit a roadblock.

Restaurant Brands International (RBI), who own Burger King, say that its joint venture partner has “refused” to close stores.

In a letter to employees, David Shear, president for international operations at RBI, said: “We contacted the main operator of the business and demanded the suspension of Burger King restaurant operations in Russia.

“He has refused to do so.”

He added: “Would we like to suspend all Burger King operations immediately in Russia? Yes.

“Are we able to enforce a suspension of operations today? No.”

Subway

Subway is another fast food restaurant which Russians will still be able to visit.

Twitter users have reacted angrily to the news, with one user saying: “I haven’t been to a Subway forever, now I’ll never go back to one!”

However, Subway have responded to the situation explaining that the situation is similar to that of its competitor Burger King.

A statement read: “Subway has no corporate operations in Russia.

“There are approximately 450 franchised restaurants in Russia which 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, and have limited insight into their day-to-day operations.”

A message from the editor:

Thank you for reading. NationalWorld is a new national news brand, produced by a team of journalists, editors, video producers and designers who live and work across the UK. Find out more about who’s who in the team, and our editorial values. We want to start a community among our readers, so please follow us on Facebook, Twitter and Instagram, and keep the conversation going. You can also sign up to our email newsletters and get a curated selection of our best reads to your inbox every day.