(Reuters) - Although the United States and Russia have imposed economic sanctions on each other since 2014, several large U.S. corporations, including PepsiCo Inc and McDonald’s Corp, still count Russia as a growth market.
But new sanctions and proposed legislation have raised the possibility of fresh challenges for U.S. companies in Russia.
A week ago, the United States imposed sanctions on 24 Russian oligarchs and government officials and 12 Russian companies.
In response, Russian lawmakers are considering legislation that would ban or restrict certain U.S. imports. The industries named in the draft law include software, agriculture, pharmaceuticals, tobacco and alcohol.
Earlier this week, Prime Minister Dmitry Medvedev said Russia should also look at goods produced in Russia by U.S. companies, although Friday’s draft legislation mentioned only imports.
Russia imported $12.5 billion worth of U.S. products in 2017, according to official customs data. That included aircraft, machinery, pharmaceutical and chemical products.
For a Factbox on Russia’s list of U.S. imports that could be banned, see:
Publicly listed U.S. companies generated more than $90 billion in revenue from Russia in 2017, according to the Thomson Reuters Country of Risk model, which estimates companies’ financial exposure to different countries. Among the industries with the greatest exposure to Russia are food and beverages, technology and pharmaceuticals.
Here are some of the U.S. companies that maintain significant operations in Russia.
Cisco Systems Inc’s product revenue in Russia grew 20 percent in 2017, ahead of Cisco’s technology product revenue growth in the other so-called BRIC countries of Brazil, China and India.
Apple Inc had double-digit revenue growth in Russia, the company’s chief financial officer said on an earnings conference call in May.
During the quarterly earnings call for Microsoft Corp’s in October, Chief Financial Officer Amy Hood noted that market conditions had improved in “key markets like Brazil and Russia.”
But following U.S. sanctions, two of Microsoft’s official distributors in Russia curbed sales of Microsoft software to more than 200 Russian companies, Reuters reported in January.
In Mondelez International Inc’s quarterly earnings call in January, Chief Executive Dirk Van de Put said the company had become the leading chocolate maker in Russia.
PepsiCo reported that in 2017, its Russian operations generated net revenue of $3.23 billion, which made up 5.1 percent of the company’s total net revenue.
McDonald’s categorizes Russia as a high-growth market and has opened new locations there in the past two years, according to its annual financial report.
Johnson & Johnson has identified Russia as a strong market for regional consumer brands, and the company is seeking to extend its reach there through products such as contact lenses, executives have said.
Abbott Laboratories is among the top five companies for branded generic drugs in Russia, the company’s chief financial officer, Brian Yoor, said in January.
Boeing Co named Russia as one of its largest growth markets at an industry conference in March. But in its annual report, the company noted pricing pressures from government-funded competitors in Russia, China and Japan and said it would defend itself from the “unfair subsidization of competitors.”
Russia may stop supplying titanium to Boeing as part of its response to U.S. sanctions, a parliament member said, according to a report by RIA news agency.
Ford Motor Co doubled down on Russia even as its big U.S. rival, General Motors Co, pulled out in 2015. The automaker’s sales from its joint venture with Russia-based Sollers PAO grew in 2017.
Ford now has a 3.1 percent market share in Russia, according to the company’s annual financial report. In October, the company said its Russian results “continued to improve, approaching breakeven.”
Reporting by April Joyner in New York, additional reporting by Megan Davies in New York and Maria Kiselyova in Moscow; Editing by Matthew Lewis