Editor’s note: Updated to include a statement from Coca-Cola HBC.
Atlanta-based Coca-Cola Co. is suspending its business in Russia, following a procession of Western companies to the exits — at least for now — amid public backlash against the country’s now two-week-old invasion of Ukraine.
The announcement Tuesday was released nearly simultaneously with that of rival PepsiCo, along with Starbucks, McDonald’s and other industrial firms like General Electric Co. and consumer brands.
The move also followed protests outside the World of Coca-Cola in Atlanta, where Ukrainian activists called on the company to do its part to undermine Russian leader Vladimir Putin’s war machine and the country’s global standing, the Atlanta Journal-Constitution reported. It also came as President Biden announced that the U.S.would ban the import of Russian oil.
In just two weeks, Western nations have quickly unleashed an unprecedented cascade of sanctions designed to condemn Russia’s actions and deter further aggression.
Coke has been criticized, mostly by conservative groups but also by Ukrainians, for its slow public response to the Russian invasion, especially given the company’s swift condemnation of Georgia’s controversial voting rights law last year and the company’s similarly vocal public stances on other U.S. social issues.
Coca-Cola issued the brief notice about the suspension on its website under the “investor relations” tab:
The Coca-Cola Company announced today that it is suspending its business in Russia. Our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine. We will continue to monitor and assess the situation as circumstances evolve.
Coke did not say whether its local bottling partner, London-listed Coca-Cola Hellenic Bottling Company, would halt its extensive operations in Russia.
Coca-Cola HBC has 10 plants in the country and generates more than 20 percent of its volume there. Before the war broke out in late February, Reuters reported that the bottler was considering stockpiling ingredients in preparation for a potential supply-chain crisis triggered by a conflict.
The Wall Street Journal reported Tuesday that Coca-Cola HBC licenses and imports concentrate from Coca-Cola Co. in Ireland and bottles it in Russia, which accounts for 1-2 percent of Coke’s global case volume, according to the newspaper.
Russia led growth in Europe and the emerging market segment last year, according to an annual earnings release. Coke owns a 23 percent stake in Coca-Cola HBC, a top-five bottler in the Coca-Cola global system, which nearly doubled its operating profit from 2020 to $939 million last year, largely on strong performance within Russia.
It’s unclear whether Coca-Cola Co.’s halting of its own business operations means the export of the essential ingredients to HBC will also stop — or whether the bottling partner will follow suit.
As of Tuesday night, Coca-Cola HBC’s website carried a notice that it was working with Coke to alleviate the plight of Ukrainian refugees and war victims. The companies jointly donated €1 million to the Red Cross operating in Ukraine, as well as €550,000 to the Red Cross in refugee receiving countries like Romania, Hungary and Poland. Coca-Cola HBC had already resumed operations in some less-affected areas of Ukraine after halting them briefly during the fighting’s initial outbreak.
On Wednesday HBC reiterated its desire to see peace restored and its commitment to helping those affected by the war. As for Coke’s halting business operations, the bottler said “we respect the decision and are working in close alignment on its implementation. We will thoughtfully consider the interests of our employees, customers, and suppliers in Russia. Our relationship with The Coca-Cola Company remains strong, and we continue to work in close partnership across the rest of our markets.”
In Atlanta, United Parcel Service Inc. said it had marked its Ukraine colleagues as safe, then halted shipments into Russia, and now has donated $1 million in cash and in-kind services through its foundation.
AGCO Corp., which as of Tuesday had not publicly stated whether its business would be suspended in Russia, announced it would donate $100,000 to the World Food Program USA in support of the U.N. agency’s relief programs.