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Heineken, Sbarro Pizza, TGI Fridays, and WeWork said they would leave Russia in response to its brutal war against Ukraine. Investigators say it's still business as usual.

Jul 13, 2023, 03:04 IST
Business Insider
A composite image of Heineken trucks, Russian President Vladimir Putin, and Carl's Jr. logoAP Images/Getty Images
  • A handful of major companies are under fire for their continued business ties to Russia.
  • Yale professor Jeffrey Sonnenfeld and a team of investigators updated its findings on which companies are continuing to do business.
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Some major international brands, including Heineken, Sbarro Pizza, TGI Fridays, and WeWork, are under fire for failing to expeditiously leave the Russian market despite the Kremlin's invasion of Ukraine stretching past 500 days.

Yale professor Jeffrey Sonnenfeld and his investigations team downgraded a series of household brand names for failing to live up to their initial promises to not do business in Russia following its large-scale invasion. Sonnenfeld, who has tracked the mass exodus of many Western companies, had harsh words for those that still remain.

"These companies are breaking their promises. They are functioning as wartime profiteers," he told CNN. "It's beyond disappointing. It's shameful and unethical."

Investigators downgraded a list of companies, including WeWork, Shell, Heineken, tobacco giant Philip Morris, Mondelez — the maker of Oreos —, Carl's Jr., TGI Fridays, and Sbarro Pizza. The reason for the downgrades vary but, generally speaking, it means that investigators felt the company had not done enough to exit the Russian market. The report repeatedly points out that 1,000 other companies have exited the Russian market.

Take the fast food purveyor Carl's Jr.:. Investigators gave the company its lowest possible grade, an F, for "digging in." due to their Russian subsidiary's unrepentant social media presence.

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"Indeed, its Russian Instagram page has posted nearly daily advertisements every day for the last year, showing Russians – overwhelmingly striking young females - feasting on American fast food as if there was nothing out of the ordinary," investigators wrote. Carl's Jr. did not immediately respond to Insider's request for comment.

Shell was further downgraded to an F for allegedly taking a central role in taking in huge amounts of Russian gas. In a response to Insider, the energy giant said it still has " some long-term contractual commitments" even if it has stopped buying Russian liquefied natural gas on the spot market.

"There is a dilemma between putting pressure on the Russian government over its atrocities in Ukraine and ensuring stable, secure energy supplies," a Shell spokesman wrote to Insider. "It is for governments to decide on the incredibly difficult trade-offs that must be made."

Huntsman Corporation, a chemical giant founded by the father of Ambassador Jon Huntsman, said it has working hard to leave the Russian market. The investigators gave it a failing grade for previously saying that it wanted to support its local employees.

"Today Russia represents less than 1% of our corporate revenue, and we are hopeful that we can complete an exit during 2023," Gary Chapman, vice president of global communications for Huntsman, said in a statement. Investigators said this is a "ridiculously slow timeline."

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While Heineken is given a D-grade for Buying Time due to "putting out statements every few months" touting that it will try to leave the Russian market without doing so.

Mondelez, which the report downgraded from A to D, said in a June statement that it is "focusing our operations in Russia on affordable, shelf-stable products that are daily staples for ordinary people."

"We're continuing to reduce our activities and expect further volume and sales declines as we work to make our Russia operations self-sufficient," the company said at the time. "We plan to have the Russia business stand-alone with a self-sufficient supply chain before the end of the year."

Sonnenfeld has hoped that a public pressure campaign on multinational corporations akin to the divestment movement against South Africa during apartheid can escalate the pressure on Russian President Vladimir Putin. Putin's standing has received considerable attention in the wake of an aborted coup attempt.

"The idea is to increase the level of discomfort," Sonnenfeld told CNN, "so they start to ask who the author of their misfortune is."

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The entire list of companies that have left the Russian market can be seen here. A condensed list of the companies that have been downgraded after promising to leave Russia can be read here. Investigators in a variety of fields based their findings on a mixture of public sources, such as government reports, and non-public sources such as whistleblowers, and company insiders.

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