* Says leaving due to reasons beyond its control
* Operates over 400 outlets across Russia
* Russia's Zhirinovsky calls for restaurant pickets
(Adds McDonald's comment)
By Natalia Zinets
KIEV, April 4 McDonald's Corp said on
Friday it had closed its restaurants in Crimea, prompting fears
of a backlash as a prominent Moscow politician called for all of
the U.S. fast food chain's outlets in Russia to be shut.
Crimea's annexation by Russia, which Ukraine and the West do
not acknowledge, has worried companies with assets in the Black
Sea peninsula as it is unclear how the change may affect their
McDonald's said the decision was strictly based on business
and had "nothing to do with politics." Nevertheless, its move to
temporarily close restaurants in Simferopol, Sevastopol and
Yalta is likely to be seen as emblematic of the rift in
Western-Russian relations, now at their lowest point since the
end of the Cold War.
"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
The Crimean outlets are not franchises, but owned and
operated by McDonald's itself.
The closures follow Geneva-based Universal Postal Deutsche
Post's announcement that it was no longer accepting
letters bound for Crimea as delivery to the region was no longer
Economic relations between Russia and Ukraine have worsened
since Russia annexed Crimea last month in response to the ouster
of Russian-backed president Viktor Yanukovich after months of
street protests in Kiev.
Targeted sanctions imposed on a number of prominent Russians
by the United States and the European Union have alarmed some
Russia raised the price it charges Ukraine for gas on
Thursday for the second time this week, almost doubling it in
three days by cancelling previous discounts.
While that may hurt Russian sellers, it piles
pressure on a Ukraine teetering on the brink of bankruptcy.
Moscow has often used energy as a political weapon in
dealing with its neighbours, and European customers are now
concerned Russia might again cut off deliveries.
The Ukrainian government said it was looking at alternatives
including buying gas from western neighbours, an option that
would mean reversing flows in transcontinental pipelines.
Moscow is applying economic pressure in other areas.
Russian riot police last month took control of a factory
belonging to a Ukrainian confectionery magnate in the city of
Lipetsk as part of an investigation into the company's affairs,
the Ukrainian government has said.
Petro Poroshenko, a billionaire oligarch known as the
"Chocolate King", is the front-runner in Ukraine's presidential
election, which has been set for May 25.
Ukraine this week temporarily banned seven Russian food
companies from selling some of their products on Ukrainian
McDonald's said it would help relocate staff to work
in mainland Ukraine, signalling it did not expect its Crimean
businesses to reopen in the near future.
The deputy speaker of the Russian parliament, Vladimir
Zhirinovsky, known for his anti-Western rhetoric, demanded that
McDonald's entirely pull its business out of Russia.
"It would be good if they closed here too ... if they
disappeared for good. Pepsi-Cola would be next," Russian media
quoted Zhirinovsky as saying.
Zhirinovsky, whose nationalist Liberal Democratic party
largely backs President Vladimir Putin in parliament, said the
party would organise pickets at McDonald's restaurants across
McDonald's, which operates more than 400 restaurants in
Russia, was the first international fast-food chain to tap the
Russian market when it opened in Moscow's Pushkin Square before
the collapse of the Soviet Union. That branch had the highest
sales and served the most customers of any McDonald's outlet in
A Russian backlash against McDonald's products would have a
significant impact on company profits. McDonald's sees Russia as
one of its top seven major markets outside the United States and
Canada, according to its 2013 annual report.
Russian moves to shun McDonald's could backfire, according
to Russian newswire RBK, which has pointed to Russian food
suppliers to McDonald's that would suffer as a result.
(Additional reporting by Alessandra Prentice, Elizabeth Piper
and Lisa Baertlein; Editing by Giles Elgood and Alastair