McDonald’s Backs Out From Crimea: Was The Decision Political or Due To Financial reasons?
With Crimea a part of Russia, political and diplomatic tensions have fanned the fears of corporations. While the European Union and the United States have imposed economic sanctions as well as diplomatic ones, corporations did not get involved in the ordeal until now. One American fast food chain has closed its few stores in the peninsula due to the region's instability.
On Friday McDonald's announced that it would be closing its three restaurants in Crimea, according to USA Today. The restaurant chain said the decision was not made because of political reasons but rather financial ones; however, members of Russia's legislature are expected to condemn the decision.
The leader of the nationalist Liberal-Democratic Party (LDPR), Vladimir Zhirinovsky, called on McDonald's to close all of its 400 restaurants in Russia. He further threatened the fast food chain with protests. "I will give an order to the LDPR local branches to place pickets outside all of McDonald's restaurants," Zhirinovsky said on Russian television.
Yet, the company remains adamant about its decision. In their statement they explain financial and economic reasons for their decision, since the three restaurants are not franchises but are directly run by the company. According to Reuters, the stores are in the main cities of Yalta, Sevastopol and Simferopol and all have been closed until further notice.
"Like many other multi-national companies, McDonald's is currently evaluating potential business and regulatory implications which may result from the evolving situation in Crimea," McDonald's said in a statement. "Due to the suspension of necessary financial and banking services, we have no option but to close our three restaurants in Crimea."
Russia may also retaliate with economic threats. With control over the gas supply to the Ukraine and the majority of Europe, Russia could suspend the distribution of energy. Russia, according to Reuters, has already raised the price of gas to Ukraine for the second time this week on Thursday.
Reuters adds that McDonald's is not alone in leaving Crimea. The Geneva-based Universal Postal Deutsche Post has suspended deliveries to Crimea, explaining that delivery could not be guaranteed.