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
"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
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
"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
"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.
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
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
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"We are monitoring closely recent geopolitical developments, to make
sure we can adapt to changing conditions and minimise 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 defence.
"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 <PEP.N>
factories continued to function regardless of political crises," he
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.
(Additional reporting by Natalia Shurmina in Yekaterinburg and Maria
Kiselyova, Writing by Dmitry Zhdannikov; Editing by Will Waterman)
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