© Reuters. A view shows a plant of PepsiCo company in Azov in the Rostov region, Russia March 9, 2022. REUTERS/Sergey Pivovarov
(Reuters) -Nestle, Philip Morris (NYSE:) and video gamemaker Sony (NYSE:) joined the list of multinationals stepping back from Russia on Wednesday as pressure mounts from consumers in the West to take a stand against the invasion of Ukraine.
Nestle, the world’s biggest packaged foods group, fell into line with rivals Procter & Gamble (NYSE:) and Unilever (NYSE:) in halting investment in Russia, and Mondelez (NASDAQ:) International will scale back nonessential activities while helping to maintain “continuity” of the Russian food supply.
Cigarette maker Philip Morris said it would scale down manufacturing, Imperial Brands (OTC:) suspended it, and Camel maker British American Tobacco (NYSE:) Plc said its business in Russia continued to operate, but that it had suspended capital investment.
Sony, whose movie studio has already stopped releases in Russia, said its PlayStation gaming unit would stop shipments and operations in Russia. “Sony Interactive Entertainment joins the global community in calling for peace in Ukraine,” it said.
Some companies are taking similar action without calling out Russia. Many businesses face difficulty working in Russia due to sanctions and lack of shipping, in addition to pressure from consumers and investors.
Heavy equipment maker Deere (NYSE:) & Co, saying it was “deeply saddened by the significant escalation of events in Ukraine,” announced it had ended shipments to Russia two weeks ago, and subsequently to Belarus, and said it would follow U.S. and international sanctions.
Miner Rio Tinto (NYSE:) said it was working to maintain supplies of Russian fuel to its Mongolian mine.
“The reality is, Mongolia has two very big, powerful neighbors, so it’s quite important for us to maintain healthy, peaceful, balanced relationships,” said the head of Rio’s copper business, Bold Baatar, referring to Russia and China.
But pressure in the West is building, and hotel companies Hilton Worldwide Holdings (NYSE:) and Hyatt Hotels (NYSE:) Corp said they would suspend development in Russia.
Coca-Cola (NYSE:) Co and McDonald’s Corp (NYSE:) halted sales in Russia on Tuesday in symbolically potent gestures. A senior member of the Russian ruling party has warned that foreign firms that close down could end up having their operations nationalised.
McDonald’s said the temporary closure of its 847 stores in the country would cost it $50 million a month.
Sportswear firm Adidas (OTC:) also quantified the cost of scaling back its operations, saying it would take a hit to sales of up to 250 million euros ($276.7 million).
Yum Brands Inc, parent of fried chicken giant KFC, said it was pausing investments in Russia, a market that helped it achieve record development last year.
Carlsberg (OTC:) said it was suspending Russian brewing of its namesake brand of beer while keeping its Russian Baltika brand operating.
“We feel a moral obligation to our Russian colleagues who are an integral part of Carlsberg, and who are not responsible for the actions of the Government,” Carlsberg said, adding that it was withdrawing financial guidance for the year.
E-commerce company Shopify (NYSE:) Inc joined the crowd, saying it would suspend Russian operations and collect no fees from Ukrainian merchants, citing millions of Ukrainian refugees needing support.
‘LAWS OF WAR’
In response to the exodus, Andrei Turchak, secretary of the ruling United Russia party’s general council, warned that Moscow might nationalise idled foreign assets.
“United Russia proposes nationalising production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine,” Turchak wrote in a statement published on the party’s website on Monday evening.
The statement named Finnish privately owned food companies Fazer, Valio and Paulig as the latest to announce closures.
“We will take tough retaliatory measures, acting in accordance with the laws of war,” Turchak said.
Moscow, which calls its invasion of Ukraine a “special military operation,” has been hit by sweeping Western sanctions that have choked trade, led to the collapse of the rouble and further isolated the country.
Banks and billionaires have also been targeted, with the European Commission preparing new sanctions targeting additional Russian oligarchs and politicians and three Belarusian banks, Reuters reported.
While the war in Ukraine and the sanctions have bolstered prices for commodities that Russia exports such as oil, and titanium, those sanctions have largely barred Moscow from taking advantage of the high prices.
On Tuesday the United States banned Russian oil imports.
U.S. oilfield services company Schlumberger (NYSE:), which derives about 5% of its revenue from Russia, said the ongoing conflict would likely hurt results this quarter.
Global commodities trader Trafigura Group raised a $1.2 billion revolving credit facility from banks to help address soaring energy and commodity prices.
Norway’s Yara, a top fertiliser maker, said on Wednesday it would curtail ammonia and urea output in Italy and France due to surging gas prices.
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