Heineken and Imperial Brands latest to halt Russian operations

Coca-Cola, Starbucks and McDonald’s said on Tuesday they were all suspending operations in Russia amid a growing consumer backlash.

09 March 2022

Beer giant Heineken and cigarette maker Imperial Brands have joined a growing list of firms to halt operations in Russia amid a corporate exodus from the country in response to the Ukraine conflict.

Bristol-headquartered Imperial – the group behind brands including JPS and Davidoff cigarettes – said it was pausing production at its factory in Volgograd, alongside all sales and marketing activity in the country in a move impacting around 1,000 employees.

Russia and Ukraine together accounted for 2% of Imperial’s net revenues last year, or around £656 million.

It came just hours after Dutch brewer Heineken said it was stopping the production and sale of its own brand beer in Russia.

The firm is also reviewing its strategic options for the future of the business in Russia, where it has had operations for 20 years.

The owner of KFC and Pizza Hut, Yum! Brands, had earlier revealed it was pausing 70 KFC company-owned restaurants in Russia and was due to suspend all 50 Pizza Hut franchise outlets.

Babycare retailer Mothercare also separately announced on Wednesday that it has paused all its business in Russia, which accounts for up to a quarter of its worldwide retail sales, sending shares plunging by more than a quarter at one stage.

It followed announcements late on Tuesday by Coca-Cola, Starbucks and McDonald’s that they were all suspending operations in Russia amid a growing consumer backlash and threats of boycotts for failing to pull out of Russia.

But a raft of global corporate giants have remained tight-lipped on their Russian operations, despite mounting pressure from consumers.

Brands including Cadbury owner Mondelez, Durex to Dettol maker Reckitt and Dunhill and Lucky Strike maker British American Tobacco (BAT) are among those continuing to trade in the country.

BAT’s Russia business employs around 2,500 staff across its headquarters in Moscow, 75 regional offices and a factory in St Petersburg.

But it has so far said only that it “operates in compliance with all applicable local and international legislative requirements and will adhere to any applicable sanction regimes”.

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