McDonald’s to Exit from Russia | Hacker News Reader

McDonald’s to Exit from Russia

corporate.mcdonalds.com

382 pointsrichardboegli361 comments

Can you sell the Russian business without violating the sanctions?

I'm not sure who downvoted you. It is a good question. McDonald's and other consumer goods type companies are not sanctioned, so the company can sell its assets. For that matter they could continue to operate as normal in Russia if they choose.

I'm not sure they really could easily continue to operate as normal. Their business units in Russia get paid by consumers in rubles, but due to the financial sanctions, they can no longer convert rubles to US dollars [1]. From the point of view of their non-Russian shareholders, this effectively means all that money is inaccessible. This would result in complications in reporting the revenue on their income statement. Plausibly (I am not an expert), this would mean they can't even recognize the revenue at all. At minimum, it becomes an open question whether or not the revenue will ever benefit the corporation or if it will be 'trapped' perpetually.

[1] This is my understanding. If someone knows better, please post. One source that goes into some detail about the current situation is: https://www.washingtonpost.com/business/energy/how-war-and-s...

You're right, currently you can't get your revenue outside unless you're down to use a scheme involving exchange for trades inside Russia, move them outside and turn back to money. I've diagonally read the article linked and it depicts everything correctly.

Diagonally?

"To read diagonally" is a Russian idiom meaning "to skim-read".

In Russian "to read diagonally" means "to skim" in English. Like, you don't read left to right, top to bottom, but straight from one corner to the other.

In French as well, FWIW.

French is now in bed with russian? Mont dioaux ;)

In 19th century, almost every Russian either spoke French fluently, was a priest or couldn't read.

Tolstoy’s “War and Peace” is about 2% French (~40 pages), the language of the Russian aristocracy at the time

France and Russia have been frenemies for a couple of centuries now :)

Finally a use for Bitcoin?

Only if there is someone who'd like to sell in rubles.

Not sanctions, but Russian regulation. From your link:

>The Bank of Russia more than doubled the benchmark interest rate to 20%, a 19-year high, on Feb. 28 and also imposed capital controls, including a ban on foreigners’ selling of securities. Nabiullina said decisions to suspend some regulatory requirements amounted to a capital boost for banks equivalent to 900 billion rubles ($8.7 billion). Putin banned all Russian residents from transferring foreign currency abroad, hardening capital controls.

Interest rate is already back to 14%[1]. Russian economy recovered super fast. Ruble is already stronger than before war (around 64 RUB for USD). Basically sanctions are a joke made for Biden to shout once before American public attention shifts to Amber Heard trial or some other spectacle of the day.

[1] https://www.reuters.com/business/finance/russian-central-ban...

If you read your article you'll learn they are cutting the interest rate back because of sanctions (to mitigate the effects), and inflation is still soaring. 20% is not sustainable, analysts have seen this coming as Russia tries to avoid a recession, in fact the drop by 300 bps was larger than predicted.

>Ruble is already stronger than before war

This is completely irrelevant if you can't sell it for USD.

Where do you get this? You can buy USD officially at most banks. Tinkoff for example sells it for 67, which is once again even lower than before war.

It sounds like Russia might get declared a terrorist state soon. I assume that changes things.

> It sounds like Russia might get declared a terrorist state soon.

Lithuania has apparently already done that.

As it should be.

https://www.dailymail.co.uk/news/article-10797707/Russian-br...

IANAL but Russia is legal to do business with with exception of certain corporate entities and individuals. There's a deny-list, not an allow-list.

Unfortunately, since the latest war the deny-list has grown substantially (making it a bit difficult to ensure you aren't accidentally servicing someone involved with a sanctioned entity), combined with political pressure this prompted some businesses to go an extra mile and cease operations in Russia completely.

Russia has uniformed soldiers in there conducting war -illegally, if wars are other than illegal, or at least not sanctioned by the UN and also committing war crimes.

But I don’t think it’s terrorism. Terrorism usually has a few criteria: not a regular army, and typically don’t use heavy military equipment but rely on guerrilla tactics and aim to terrorize because they are incapable of taking over a territory —because of a lack in numbers for control.

They would also qualify if they “export” terror by training, providing comfort and logistics to terrors groups. Maybe the latter applies more than the former. Though a few other countries could easily be labeled as such too.

There’s plenty of evidence though that the Russian army is seeking to terrorize civilians, including bombing hospitals / schools and leaving mines and booby trapping homes of civilians, specifically because they are having trouble taking over the territory. It would be weird to me that a military unit can do what terrorists do and not be labeled that way just because they are officially part of an army and have modern equipment. That’s not something a “normal” army does to protect its territory. https://ctmirror.org/2022/05/16/designate-russia-a-state-spo...

I think we need to be careful. Is it the stated goal and mission to terrorize or is that being carried out by rogue units? Most army and war operations do have rogue units —those doing things on their own. Just about any war has this aspect. If this is a criteria then we’ve all been terrorists and calling terrorism ceases to have a defining meaning.

But again it likely depends on how widespread and sanctioned or ignored by superiors these tactics are in the current conflict.

I understand the need to be careful but when you have widespread reports of execution and rape of civilians in all the areas being invaded by Russia (i.e. all 3 fronts) it seems to be more of a pattern than an exception.

Look, there is no denying war atrocities. But all conflicts have them to one degree or another. If we go by the definitions above, then most allies (and foes) have engaged in terrorism too, including ourselves and then the distinction the term provides disappears.

Let's look at it from another angle. In order to submit the people of Ukraine, has Russia taken out all the stops? Do they have other more lethal and effective options?

Have you misplaced your comment? It is obviously an ethically grey area, but the question was whether it violates sanctions or not. It isn't, as far as I know (if there's someone better informed I'm happy to be corrected).

According to Russia it’s a “SVO”, not a war. Which means they are not soldiers. Ukraine keeps treating them in a humane way, but technically they could be just shot on sight. Russia wouldn’t care anyway, they don’t even bother to pick up corpses.

I think the problem is that they may not be allowed to bring the money outside Russia, as there are now capital controls on foreign currency. That's why there a few foreign factories, like Renault who seemed to have "sold" them for like 1 ruble.

For context, Renault sold its majority stake in AvtoVAZ (Lada, 45k employees) today for 1 ruble to the Russian government, with the option to buy-back for the next 6 years:

https://www.lemonde.fr/en/economy/article/2022/05/16/french-...

Legally? I'm sure there are a fair number of ways. For those who don't recall when Pepsi (as in "Pepsi Cola") had the 6th largest navy in the world:

https://www.warhistoryonline.com/instant-articles/pepsi-once...

But if you're running a huge consumer-brand corporation in the social media age, with the great majority of your sales in places where Russia's recent actions are very unpopular, then "could we legally continue...?" is not basis for your decision.

I used to love that story (about Pepsi's navy), but it actually doesn't seem to be true, unfortunately. There was a deal in place, but it never happened thanks to the 1991 breakup of the USSR. And even if it had, the small number of ships involved wouldn't even be close to the 6th largest fleet.

https://melmagazine.com/en-us/story/did-pepsi-have-one-of-th...

They won't be able to sell them at all. Putin has already said that any companies that leave Russian markets as a result of the current conflict will have all their assets nationalized. This is what happened to McDonalds in the Donbass -- they're still operating and called "DonMaks". The experience is extremely similar to a normal McDonalds. The only thing that is obviously different is the fries.

https://www.instagram.com/p/BLkrs5FBkct/ https://www.instagram.com/p/BSQzA_dhatu/ https://i.insider.com/58dd477677bb70f13a8b4c89?width=1190

What about the fries is different?

They're just normal fries, made fresh from potatoes. McDonalds fries are a result of a process of many steps.

Russian social media are full of winking posts hinting that McDonald's will sell operations to a Russian company which it will still profit from "behind the scenes" (via offshore proxy or some other indirect way). They also hint that this will pave the way for other Western companies currently in limbo: split ownership between controllable proxy and Russian owner. And at the same time shout in Bloomberg how much you condemn Russian invasion to pacify Western public.

Can anyone confirm if it's possible? I hope it's Russian desinformation again, but I fear it's possible looking at how "well" Western "sanctions" work (Moscow feels great, ruble is much stronger than even pre-war).

Can't confirm and anyone who can, will not. Sanctions evasion is something OFAC frowns upon and comes down on rather heavily. Just few weeks ago banks that were 'offering options' to customers were smacked down[1]:

"The US Department of the Treasury in a statement said it put sanctions on Russian commercial bank Transkapitalbank, whose representatives it said serve several banks in Asia, including in China, and the Middle East, and have suggested options to evade international sanctions."

So.. yeah. It is possible ( even with total embargo it can happen as NK has shown ), but it comes with risk. If it will be done, it will be done very quietly with as few people knowing as possible.

[1]https://www.aljazeera.com/economy/2022/4/20/new-us-sanctions...

It's just one of the possibilities. It's not like corporations aren't full of “government relations” staff whose job is inventing creative names for bribing officials, and creative methods of doing so. Especially in “interesting” countries where it's easy to have an excuse that “everyone does that”.

There is technology that can be important for military industry; no doubt it is going to be tightly controlled. There are people who decided it was unacceptable to work in Russia; it was their choice. However, these corporations are not people, nor they are important in the arms race. If we skip the fact that Central Bank severed everyone's ability to do business to control the money flow out of the country, corporations that left Russia made statements about leaving it for the media picture. And flashy media picture is once again really important to hide the elephant in the room — what really powers Russian economy, and how. It's not McDonalds.

Ruble is definitely not much stronger, it’s just practically frozen so it is not defined by free market rules, but by Russian government made ones.

I have seen a lot of people write this but I don't understand how. Shouldn't there be a black market rate in that case? Is there one? Some quick Googling gave no articles.

I am almost sure there is such market. If you visit Russia somehow, you are likely to exchange currency with citizen at beneficial rates. Chances are its very similar to pre iron curtain fall - people made fortunes in Poland on such exchanges. Same thing in Cuba, there were two currencies - one local, one for internationals(unsure how it is now).

Ye. I mean just cutting out Forex middleman is beneficial.

It would be interesting to know the "real" rate to get the scope of the currency control.

No, Moscow is fine and you can buy foreign currency freely now. This is a delusion based on Western politians' loud promises which never came true. We were promised crushing sanctions that would reduce Russian economy to 1980's style rubble with black market of foreign currencies. It's all just a load of hype. It's important to set this clear because most of HN commenters seems to be under impression those sanctions actually had intended effect.

Can you buy a new car with all this money?

Yes. It's more expensive than before, but there's a thriving market on Telegram with prices fixed in EUR/USD. Also Chinese cars sales are growing and soon market will be flooded.

So second hand at black market rates. Sounds like sanctions are working after all.

There is not much use for dollars in Russia right now other than hoarding them (you can buy goods, but many imports are sanctioned). And after initial panic subsided, trust in the banking system looks quite high so people are less keen on hoarding cash.

Also, if you are an oligarch who plans to load your private plane with suitcases of dollars and fly to the Cayman islands, you are probably sanctioned, so that is out of question too.

No problem flying to Dubai to Istanbul and using their banking system. Actually most of Russian and Belarussian elite are happily using it. You can meet all kinds of adult kids of Lukashenko, Yanukovich there or an odd Russian silovik.

There are black markets in the form of Telegram chats and bots where people exchange cash. They aren't so necessary right now because certain limitations have been lifted and while it's not easy, you can buy cash USD or send wires to other countries.

There are two things holding the ruble high: 1. All exporters have to sell 80% of their FX income in 3 days 2. The import has shrunk dramatically and it's hard for people to travel to other countries (so individuals and businesses don't need that much cash to begin with)

Where do you get that? You can actually buy dollars in Moscow from banks. Everything is mostly back to normal or even better (retail banks sell dollars cheaper than pre-war levels). There was a brief panic and tight controls in anticipation of more severe sanctions but they never came.

Russian here. You have no point, check any exchange, in case of the accessibility Binance p2p There was growing black market exchange once ruble fallen to the 115ish to usd, and the spread was about 20%, so you could buy green cash at 150ish, but since then those exchanges shrinked.

It's actually 64 RUB per USD, Tinkoff bank sells for 67 for example. Compare to 78 pre-war. This week Central Bank lifted another restrictions and you can get up to $50k out of the country. I think unfortunately Americans drank Biden's lying kool-aid of "devastating sanctions" and happily looked away prematurely.

> McDonald's will sell operations to a Russian company which it will still profit from "behind the scenes" (via offshore proxy or some other indirect way).

so Huawei way of solving sanction issues...

let's all pretend Honor is now different entity bought by bunch of unrelated companies

Thats what GM(opel), IBM(dehomag) and Coca-Cola(fanta) did during WW2 in Germany. But I have a feeling it wont fly nowadays with social media and politicians hungry for grandstanding, especially in light of recently passed second Lend-Lease.

This is a surprisingly well-written, engaging corporate statement. Most statements are pretty bland and purely to the point but after reading this I thought I was reading news coverage of their exit not their own statement.

In Germany this is called "Gratismut" (gratis bravery). It's the current thing to hate Russia, so they don't lose anything by doing a passionate write-up about it. McDonald's also wants to convince you that they have any values, but in reality they have no problem with horrendous human rights violations in other countries.

What changed here of course is that after Putin gave Aeroloft the go ahead to seize aircraft they were leasing, western business lost any appetite for the Russian market. When your assets can be taken over at any moment and its encouraged by the state, its best to cut your losses.

A similar but more drastic example are the various communist revolutions in the 20th century. It was standard practice for the new governments to cancel any debts or obligations the previous government had and seize all sorts of foreign owned assets in country. That inevitably destroyed its diplomatic relations with many nations for decades.

So as you note, its not because McDonald's or any other corporation has morals, they are amoral entities. Its all just business and right now business in Russia is bad.

Do not forget that there was a wave of seizures of russian-owned assets in the west.

I would not be surprised, if Aeroflot still had to pay the leases they owe, but the proceeds would be paid to subjects who had their assets seized abroad. Until it evens out 1:1.

I could be mistaken but with the exception of Germany seizing the gazprom terminal, I think all of the other seizures have been to specifically sanctioned individuals. Of course in Russia they have a oligarchy so they probably see sanctioning a person the same as sanctioning a company.

There is no such thing as a yacht owned by a person; even if you wanted to operate some small one, you would create SPE (=special purpose entity, i.e. a company) for it. So they were owned by companies. Yachts are operated as businesses, especially larger ones.

And it is not just about yachts and airplanes. There were freezed accounts in usd and eur, i.e. the primary motivator for switching sale of oil and gas to rubles. These were owned by companies too.

So in this regard, there's no difference. The famous Bismarck quote about Russians comes to mind.

I understand how the ultra rich operate. There is still a difference between seizing personal assets that are in shell companies for tax reasons or what have you and seizing capital of real companies that do real business.

Or, more commonly, „virtue signaling“.

Which is bullshit, of course. They are giving up doing business in a rather large country. It’s certainly not free.

Exactly. Same as Apple waxing lyrical about privacy, all the BLM bandwagon jumping in 2020, etc etc ad nauseam

It seems that McDonald's closed stores that operated directly under their control. As a result, only stores in westert part of Russia were closed (in Moscow, Saint-Petersburg). The stores in Siberia (i.e. Novosibirsk) and in Moscow airports continued operating as usual, as they are working under franchaising. Even the mobile app continued functioning.

So not much is going to change, I think. Hell, McDonalds is even open in DNR/LNR "republics" under the name "DonMac".

I think the suggestion is that they are going to remove the branding rights from the franchise owners “de-Arching” them. So there will be no McDonalds branded restaurants in Russia.

Could they actually do that if the “lease” contract expires? (if that is the correct term for a franchise).

I assume there's a clause in the franchise agreement covering this sort of thing. If the franchisor decides to exit a market, the agreement probably provides a process to do so.

Not a McD franchisee, but I've been involved in franchise businesses before.

What will McDonalds do if Russian franchises/restaurants just keep using the golden arches, menu item names, etc?

Sure they might taste different - but what is McDonalds' recourse? Not sure they can do anything if they've decided to remove themselves from doing business in Russia. Seems similar in situation to the knock-offs in other countries that McD's doesn't do business in.

McDonalds is not "open in DNR/LNR", DonMak is a completely unaffiliated restaurant that is a knock-off of the McDonalds brand.

https://factcheck.afp.com/doc.afp.com.326T9WB

They never had an issue operating in Saudi Arabia despite the invasion of Yemen. They still maintain their Guantanamo Bay location. How is operating in Russia inconsistent with their values?

McDonalds is a symbol of US global hegemony. Exiting from Russia is maintaining that status quo. Protesting an ally of the US, or the US itself, would be a significant political statement, and probably contrary to their interests.

These things are not the same.

So what are their values that make the first two acceptable but not the third?

They list unpredictability as a factor. They obviously believe Saudi Arabia is a stable place to conduct business.

So their values have nothing to do with the humanitarian concerns they mention, just the ease of doing business in the country. Believable, but makes this press release sound like BS.

Yep. Shit comes in a variety of colors.

Something that has been bugging me for some time (genuine question, please forgive me lack of geopolitics/economy understanding) is this:

Supposing we want to hurt Russian economy - how are we hurting it by stopping selling them licenses/branding/machines to make and sell burgers and fries? Are we not ripping them off money if we sell to them? As in: we gain, they lose?

I understand we don't want to sell advanced technology, or weapons. And we also want to stop buying oil/gas or other goods produced in Russia. But burgers?

If you understand what's going on, please share it :-)

Probably just the hope of companies to improve their image by not being associated with such countries.

I mean, look how people think about companies doing China's bidding.

The only argument there is we are providing them jobs and building up local infrastructure by investing in locations, I suppose.

we can't let proprietary american advanced protein delivery technology to fall into the wrong hands, allowing them to use it to create an army of super soldiers

From what I understand, it has nothing to do with morality or hurting Russia. The banking sanctions make it impossible to do financial transactions with the country, which effectively puts an stop on business relations.

For a globally recognizable brand like McDonald's, the move to leave the country has a symbolic meaning. It sends a message to the Russian people that something is deeply wrong with the direction taken by their government. Of course, some Russians will interpret the move differently, but that cannot be avoided.

> Of course, some Russians will interpret the move differently

Russian propaganda will say something like: “McDonalds, evil American company, left our people without jobs and betrayed our trust”

most people would believe this

the blame will be shifted from Russian Government to “evil American corporation”

Sure, but not everyone is convinced by the propaganda. Some people are just plain mad they don’t have something they used to have. We’ve tried appeasing a mad expansionist dictator in the past, didn’t go so well.

This is especially keen with apple products.

Apple products can be brought from overseas

with McDonalds they would just make a clone which uses same formulas and suppliers

It's about removing sanction: denying the Russians - particularly the urban Russians - their veneer of civilization, affluence, westernization. The notion that they had accomplished something material positive in regards to moving forward in the world among nations after the Soviet collapse.

Sure they can clone brands, and sometimes they can clone products and services, you can also go to Walmart and buy Great Value brand products that are 85% as good as the brand goods. Most people still don't want to do that if they can afford not to.

People buy brands primarily (not exclusively) for social reasons of status, not because they're vastly superior to all alternatives (off brands, generics, house brands, etc). They don't need that Chanel or Louis Vuitton bag, or iPhone, they want it to show off.

Removing sanction is about the West no longer pretending Russia is a civilized nation, no longer pretending their culture is a civilized one (rather than a barbarous relic of the conquest-obsessed primitive past of the European great powers conflicts).

I think you're taking your words fairly serious, whereas they would cause a lot of good laughs outside of the bubble of "the West".

For starters, why do you think that Russia would care whether you are currently pretending anything about Russia.

The scale of these delusions can only match the scale of Putin's delusions. How detached from real life should one be to reason about people as though they were homo economicus, pathetic humanoid consumers?

Linking “brands” to “civilization” is just a widespread publicist cliche that is only observed in various “analysis” in media. When you look at what people actually did, there is no trace of such feeling. Those who were critical of the state politics reacted to the news with “things are looking turbulent, better buy some buckwheat just in case”. Those who were supportive of the state politics reacted to the news with “things are looking turbulent, better buy some buckwheat just in case”. See, no one seriously cared about McDonalds® burgers or Apple® devices, but that didn't affect “economical prognoses” in the slightest. I can make my own: not even in most glorious America there is enough people to start an uprising over McDonalds being unavailable.

What's more important, outside of lucky industries like IT, not many people can even afford to care about brands. Those who make a lot usually work in export or budget spending (or “spending”) sectors, and they are the ones who perfectly understand that their wealth depends first and foremost on supporting any decision that comes from above, not following some capitalist dreams (even though this is a typical corporate manager situation). Those who make a lot more than a lot, and used to buy castles, villas, yachts, and so on in Europe and elsewhere, had zero problems with that for decades, despite the common knowledge that almost none of them had made those kind of money independently, and with hard work. One might even theorise that shooting down Boeing full of Europeans (as opposed to lesser people across the world routinely dying on TV screens) was Putin's particularly devilish plan of forcing his daughter to stop enjoying life abroad and move back home. Such are customs in modern “high society” of “successful people”. Have anyone noticed that when US arrested Abramovich's mansion, he seemed to get irritated, and made some un-business-like comments along the lines of “I'm no different from other people buying those, what's your fucking problem?” Might be the rare occasion of him telling some truth.

There has been a very nice rebuttal back in March. I am grateful to English translators because now I don't have to state all of that myself: https://www.getrevue.co/profile/belkitz/issues/weekly-newsle...

this is pure copium and old fashioned antimodernist ranting. if it helps you sleep at night, great, but it wont work on everyone. some people dont appreciate their nation becoming north korea 2.0

North Korea 2.0 or just deAmericanized? The latter is a blessing.

I wonder what made you think that criticizing current media spectacle is synonymous with supporting anything in Russian retrograde political system going on full steam into a dead end.

The “New North Korea!” journalistic chant also explains too little. What's more important, it is a smokescreen to hide the obvious: history repeats itself. When USSR discovered oil and gas, got drunk on them, and slowly rot for two decades while madly waving guns at the other half of the world, it formed quite stable relationship with Europe. With enough “Soviets BAD!” statements “democratic West” could easily turn the blind eye to a lot of things (including deviations from global sanctions) to keep the pipelines running. Putin might not be the best James Bond, but he worked abroad and had the general idea how those deals were prepared and made. You might have noticed that fairly recently Western Europe was also ready to start using Nord Stream 2 (and give the giant middle finger to Eastern Europe because, you know, peculia non olet) despite all the pressure from US — it was the genius of Russian leadership starting Ukranian Blitzkrieg right at the same time that buried the project.

> denying the Russians - particularly the urban Russians - their veneer of civilization, affluence, westernization.

Yeah I feel very civilized, affluent, and Western when I walk into a McDonalds.

This is largely true in other countries. Affluence is relative but it’s seen as a very clean and consistent burger joint.

>“McDonalds, evil American company, left our people without jobs and betrayed our trust”

You got me curious and I decided to check. They actually carried out reasons stated by McDnalds and respected the fact that through the whole process company has behaved responsibly towards employees and seeks their future employment as a condition for perspective buyers. I saw no signs of propaganda in the article.

https://lenta.ru/news/2022/05/16/mcdonalds/

I don't think this is the reasoning at all.

I think trying to conduct transactions in a heavily sanctioned nation that's also fighting a war of aggression against a neighbor, and incurring heavy losses, is causing a headache for the bean counters, and it has finally become more trouble than it's worth, financially.

These enormous multinational behemoths - as an entity - don't give two shits about the people dying in Ukraine, Russian soldiers dying, or the Russian people enduring hardships. They care about profit.

It's no different than the stance on civil rights, or LGBQT+, or any other issue. If you look historically, these companies only bother to "do the right thing" once it has the potential of threatening profits. It may sound cynical, but the historical record is pretty solid.

All international conglomerates are amoral. Some are more amoral than others.

Any big organization is amoral. This includes countries.

The parent did not say that was the reason, they said McDonald's leaving has symbolic meaning - which it absolutely does in a huge way.

> These enormous multinational behemoths - as an entity - don't give two shits about the people dying in Ukraine, Russian soldiers dying, or the Russian people enduring hardships. They care about profit.

Of course they do care about the context, very obviously, precisely because it can affect their profits. Which is why so many companies rapidly bandied together and left Russia, even when they legally didn't have to. The stigma of being associated with Russia is brand damaging, which is ultimately profit damaging (and Russia isn't worth enough as a market for most corporate giants to warrant taking that brand hit). That's the clear corporate equation.

Thank you. Far too often people will jump in and cry "all corporations only care about profits!" which is about as interesting a statement as "all programming languages are Turing-equivalent".

Always disgusted me how two faced the vocal companies like Disney and Apple were about LGBTQ+ rights in the US yet all too happy to throw the same community under the bus when Russian, Chinese and UAE profits were on the table.

They're only interested in the community as a PR tool, not the actual lives of the people, it's gross.

i think what’s going on is that lots of companies have collectively left on their own (not sanctions) and McDonalds is being “bullied” to leave too, possibly by their shareholders

the case here might be that they don’t want to devalue their brand, which is worth far more than their business in Russia

It's about image. The most powerful weapon the west has isn't nuclear bomb but its culture and image. McDonald's business is a drop in the bucket in the tax revenue for the Putin regime. But if you (Putin) wants to claim that Russia is a powerful country, it needs to project an image of wealth, stability, etc.. McDonald, Starbucks, etc helps with that image.

Playing word association the word that doesn't come to mind when you say "McDonalds patrons" is wealthy.

Only a relatively wealthy population can afford fast food. The "convenience" of fast food is something that poor people (actually poor, not Western poverty) can't afford.

So yes, in the US/EU etc, McDonalds is seen as "cheap" food, but in places like Asian countries like Thailand, McDonalds is considered "middle class".

It's probably much simpler than that. If Putin's going to keep invading other countries for little or no reason, what's that nutbar going to do to your property? There's a $20 term for this but I forget what it is.

In addition to the reasons others here have said, of course.

Well, McDonalds, Inc. is not necessarily doing this to hurt the Russian economy. They are doing it to save money.

The war and the Western sanctions have limited their ability to operate restaurants in Russia. Because of this, they have shut down their restaurants while continuing to pay staff, leases on their buildings, etc. This means they have a constant outflow of cash to Russia which they want to stop. Shutting down the business stops the bleeding.

Perhaps the question is: why would public policy makers in the West want to impose such broad sanctions? Why not continue to allow Western companies to profit in Russia (i.e., "rip them off")? The answer is primarily that voluntary economic business transactions like this are generally win-win for both sides. Yes, McDonalds earns money selling branding, etc., but the Russians on the other side of the transaction also earn money through the use of the branding and so on. By cutting off Western companies' financial access to the Russian market, it does hurt the Western companies, but it also hurts the Russians because it deprives them of whatever benefits they were obtaining from the Western companies.

Sanctions don't work. The goal of sanctions is not to hurt Russia. The only thing sanctions accomplish is to give a feeling of self-righteousness.

Sanctions when applied properly can work. They need to actually impact directly on those who are politically powerful, while also imposing difficulties day-to-day on the general population, which encourages unrest and internal disputes.

Russia thought it had protected itself by having low foreign debt and large foreign reserves. What it didn't count on was that the US and EU reserve banks would freeze its foreign reserves, while also getting SWIFT and the MC/Visa payment networks to disconnect from the Russian banking system.

There currently is no alternative for foreign currency exchange and Russia has had to engage in much less efficient and expensive (because they are being made to pay through the nose) foreign exchange through China's nascient payment systems, which means they are exchanging rubles for yuan, instead of USD/EUR.

India, Turkey, China and others are switching to alternative payments for Russian commodities.

Europe is opening Ruble accounts with Gazprombank to keep the gas flowing.

These sanctions hurt the monopoly of American financial system more than anyone else.

Is your premise that when two parties trade, the selling party "wins" and the buying party "loses"? Ignoring the specifics of McDonald's, in general, the reason to make a trade is that both parties believe they will be better off. By not trading, it hurts both parties.

I would not underestimate how critical influence is.

Influence / knowledge how to operate big chains,.how to organize supplier how to do marketing etc.

If you are a smart modern person speaking English also makes it easier for you to stay in your country when you have appropriate job opportunities and a ecosystem which feels adequate.

It's not that I would miss McDonald's if it would disappear were I live bit if a lot more does, I would probably want to migrate away.

I think this is a bad sign for Russia. And IF they are able to recreate what they already had, it will take time and be costly.

The basic premise in market economies is that if a transaction occurs it is beneficial for both the buyer and the seller. This makes intuitive sense if you think about it - nobody forces you to buy McDonald's, you do so because you think a Quarter Pounder is worth the price you pay.

Sanctions work by preventing this transaction from happening, which means both the buyer and the seller are worse off compared to when they are allowed to trade.

The key point here is that although both the buyer and the seller are worse off, one party may be disproportionately impacted. This is the case with the Russian sanctions, as Western companies can usually find other markets (although less lucrative) but Russia is now having serious trouble sourcing certain components.

McDonald's is likely doing this for image reasons or to appease stakeholders rather than doing it to punish Russia directly, but the outcome is that Russians are slightly worse off than before.

It's also cumulative. It's only one market for each individual seller, but the buyer is deprived of many sellers.

The transaction can be mutually beneficial: We gain cash worth more to us than the licenses/branding/machines, they gain licenses/branding/machines worth more to them than the cash. For the classic example, see:

https://en.wikipedia.org/wiki/Comparative_advantage#Ricardo'...

Cutting them off from the global economy does damage their economy. No, burgers aren't as important as banking or bullets, but it's something.

Are you suggesting that countries that allowed McDonald's to operate are getting ripped off? Sounds entirely reasonable.

There are a few things: it looks bad if McDonalds is still doing business with them. also, for a lot of people having big brands makes you seem more legitimate - 20 years ago or so the small town near me got a McDonalds and it was a huge deal that made people think the town was more legitimate. there is also the fact that doing business in russia right now may be more trouble than it is worth and as far as hurting the economy, even though McDonalds corporate would make money from selling in Russia, they are paying the employees, distributors, utility companies and so on. So not getting that cut will hurt people. Yes, it probably won't hurt the rich or powerful but it may be part of death by a thousand cuts.

There is a moral/reputational side to this too.

And I'll add "What changed here of course is that after Putin...." started getting his arse kicked, several western companies now dont wish to be seen as Russian-friendly (they still are, of course - they just don't wish to be seen as such).

Had the Ruskies taken the ukraine in a few days, as predicted, you can bet there'd be golden arches all-the-fuck over Mariupol right now.

*oh, and finland and sweden could get fucked, too. They didn't give a hoot until for quite several years.

If any western company actually gave a crap, they would have been out on day 1, or 7 or even 30...not 3 months later.

And, as for Renault being called out by Zelensky.....

Closing McDonalds surely is a good for the general health of the populace. I'm against banning fast food but I see no downside. McDonalds is a symbolic offender in the sugar epidemic and the McPutin rippoff surely won't be as popular as the Big Mac.

Also in the press release

> McDonald’s restaurants in Ukraine remain closed while the Company continues to pay full salaries for its employees in the country…

Bravo to McDonald's for that. My company (I'm an American working for an international one based in Germany) is doing the same thing. They're also building temporary small houses for our Ukrainian employees and families on corporate property in Poland and Germany. They also tried paying our Russian employees full wages too, until local Russian authorities and NATO/EU sanctions stopped that.

That, and they matched Euro for Euro employee contributions to any Ukrainian relief effort they donated to. Outstanding response, I think.

I remember the evening news on TV when the first McDonald's restaurant opened in 1990 at Pushkin Square. There was a huge crowd of Russians outside, wanting to try the burger.

It was a sign of a more open world, something resembling an end of the cold war. There was a sense of optimism in the West about a peaceful future with Russia.

It does not matter that McD itself is closing in Russia, but it does tell us something about what the political and security-climate has reverted to.

One of my traumas from life in Russia during my childhood is the understanding that you live in a North Korea redux, and you have McDonalds, and other Western companies from democratic countries coming here, and feeding that regime.

US politicians kept droning how terrible Russia was through whole 200X, yet allow their companies to "wage business on the free world"

Can you imagine McDonalds in Pyongyang, and Don Thompson happily fellating political commissars in their boardroom? This is how I felt Western companies were behaving.

I'd be interested in your opinion on the alternatives. Would it have been better for you (and the country) if those businesses had decided in the noughties that Russia was not democratic enough and pulled out? Do you think it would have made a major impact at that time?

Or do you think it should have been tackled from an anti-corruption point of view with investigations into how those companies were conducting business?

>"One of my traumas from life in Russia during my childhood is the understanding that you live in a North Korea redux, and you have McDonalds, and other Western companies from democratic countries coming here, and feeding that regime."

A child traumatized by the thoughts about geopolitical issues?

> The Company intends to initiate the process of “de-Arching” those restaurants, which entails no longer using the McDonald’s name, logo, branding, and menu, though the Company will continue to retain its trademarks in Russia.

Obviously they'd want to keep the trademark, otherwise they have no way to prevent those sold restaurants from "re-Arching" after the "de-Arching" :)

> Obviously they'd want to keep the trademark, otherwise they have no way to prevent those sold restaurants from "re-Arching" after the "de-Arching" :)

If a country has gone sufficiently rogue to invade a neighbour, respect for property[0][1] - and by extension trademarks - appears to matter very little, at least for now?

[0] https://edition.cnn.com/2022/03/16/business/russia-aircraft-... [1] https://www.bbc.com/news/61357256

That's true, but abandoning them will be a guarantee they won't be respected. At least there is some leverage and the ability to wage a lawsuit. But I agree there is little chance it will succeed.

Yeah, in the short term, any property rights of foreign organizations in russia is probably not something to rely on. On the other hand, regimes do fall and organization can survive long enough for the policy in russia to change. So it makes sense at least have a claim for trademark (because right now it is really a claim, not a property, since russia can take it away any time it wants)

Remember that the local Coca Cola branch survived in Nazi Germany during the war and even launched a new product: Fanta.

Many US companies did business with the Nazis through subsidiaries. IBM, Coca cola, Chase Manhattan bank, Ford, etc.

Russia is party to several international treaties that allow it to be sued outside of Russian courts if it doesn't uphold intellectual property law, and if those suits do not go Russia's way, then it is now possible that Russian assets can be seized as compensation.

Or, to oversimplify it, if Russia decides that anyone can use McDonald's trademark, then maybe Gazprom's pipelines won't be Russian anymore.

I don't think those pipelines are very useful without gas

Nor is the gas very useful without the pipelines. Mutually assured de-gasification as it were.

Putin cares too much about his internal front. He will gladly throw any foreign property owned by the Russian state under the bus if he thinks giving the Russians the foreign brands they are accustomed to can quell any disobedience or unrest. Either Russia takes the nationalistic route and converts all of its fast food joints to Uncle Vania's, or it will surely reopen its McDonalds while violating their brands. I don't really think they give a damn anyway, their business relations with the West are gone for good and they won't be mended any time soon.

Russia makes most of its money from primary sector exports (grains, oil, gas, minerals, ...), and that's basically the only thing they care about. They are building new markets in Asia for that, in countries like China that definitely don't give a damn about Burger King's IP or whatever. They know that unless Putin is deposed tomorrow and Russia demilitarises the Europeans will switch to LNG and North African natural gas anyway, they are just playing ball with what they have.

Also, those properties in the West would probably get confiscated or sequestered very soon anyway.

I think you are right. I don't see many options for Putin. Russia's relationship to Western businesses is gone for at least a decade. Putin's best option is to confiscate any Western properties and businesses that won't play ball with him. Russia has become a pariah state, so it can just keep walking down that path anyway.

You are a bit late to the party. Many Russian assets have already been seized, among them the Gazprom subsidiary in Germany.

We are in a weird spot where Russia is very much interested in economic relationships continuing more or less as is (exemplified by the conciliatory rhetoric from the Russian government, essentially they are saying "no hard feelings, return any time" to the departing companies) so will mostly respect property rights. OTOH the West sees financial and economic relationships as their main weapon in this war so most funky moves related to property rights will be initiated by the Western governments (e.g. many "sanctions" essentially are extrajudiciary property seizures).

> Many Russian assets have already been seized, among them the Gazprom subsidiary in Germany

Most Russian assets have been frozen, not seized. The German subsidiary made news for being an exception in that Germany took control of the subsidiary. But it’s still Gazprom’s property.

Are all of those mega yachts getting boarded not considered seized?

That is my understanding. The property still belongs to the owners

>> Are all of those mega yachts getting boarded not considered seized?

> That is my understanding. The property still belongs to the owners

IIRC, there are efforts being made to outright seize stuff like the yachts, sell them, and give the proceeds to Ukraine. I'm not completely up on the details, though. I think some criteria might be if the property is de-facto owned by the Russian state, or was acquired due to corrupt association with it.

What good is paper ownership if you can't actually use your property?

You get it back eventually

The problem with that is that Putin doesn't seem to care about the damage to Russias economy and hijacking the gas pipelines is likely to do just as much damage to the countries downstream. One of Gazproms local off shots managing gas reserves was recently seized in Germany, however without Gazprom delivering gas its tanks will just stay empty and they represent a not insignificant amount of our winter reserves.

Hasn't the US already been seizing stuff somewhat randomly? I don't think there is a case that Russian yachts are contributing to the war effort, but there seems to be a push on to make off with them.

The claim is the Russian rich folk commit criminal acts. The method is civil forfeiture. The outcome is nothing need be proven, the assertion is sufficient.

“We are already working with our international partners to freeze and seize properties belonging to sanctioned Russian oligarchs worldwide,” said Attorney General Garland. “We will continue to work together to take all appropriate actions against those whose criminal acts enable the Russian government to continue its unjust war against Ukraine.”

https://www.justice.gov/opa/pr/us-departments-justice-and-tr...

Reward program: https://home.treasury.gov/about/offices/terrorism-and-financ...

> Russia is party to several international treaties that allow it to be sued outside of Russian courts if it doesn't uphold intellectual property law...

> The outcome is nothing need be proven, the assertion is sufficient...

There seem to be inconsistent messages in this thread. Do we need to prove anything to take stuff off the Russians or don't we?

> There seem to be inconsistent messages in this thread. Do we need to prove anything to take stuff off the Russians or don't we?

Isn't it like it has always been in human history? You don't need to prove anything if your goal is total destruction of your enemy and everything associated with them. Just do what you think will harm them the most. Until the total destruction of one or another side. Or the whole humanity.

The only thing I don't understand here is why some people act surprised when that same enemy fight back using the same or similar means? Like seizing property and assets of companies, citizens, and administration of one state, and then complaining that intellectual property of your administration, company, or citizens might not be respected in that same country?

> some people act surprised when that same enemy fight back using the same or similar means?

Such as the headline "Russia ‘steals’ 150 planes leased from foreign owners"?[0]

[0] https://www.telegraph.co.uk/business/2022/04/23/russia-steal...

> then maybe Gazprom's pipelines won't be Russian anymore.

Germany already took over control of Gazprom Germania, with tanks and pipelines within Germany. So that isn't much of a threat.

https://www.bundesnetzagentur.de/DE/Fachthemen/Elektrizitaet... (PDF, German language)

Not quite. It is still the property of Gazprom, but the control is exercised by the German authorities at the moment to ensure proper operations.

Also if it weren't taken over it would be subject to sanctions as well.

That is a legal nuisance. Operational control is with the government. Profits (if there are any) won't be paid out. Thus who is listed as owner doesn't matter for any practical purposes. It however allows to give back control in case the situation is cleared. But that doesn't seem likely, thus the company will slowly be dismantled.

> Russia is party to several international treaties

Russia (or more precisely Putin) obviously gives a sh* about international treaties. The invasion in Ukraine breaches more than just one such treaty.

So why would they care about intellectual property?

It's like saying a prayer when your plane is about to crash and there's nothing else you can do. Probably won't amount to much, but what's the downside?

In McD's case, there's tremendous upside. Perhaps it will be feasible for them to operate there again someday.

Didn't they already basically legalise pirating western software?

Even the Nazis did not try to resurrect the Coca-Cola brand when it disappeared - they made their own thing and called it Fanta.

Just saying.

The US has preemptively invaded many countries and still very much respects trademarks.

Could they still prevent it, though? What would they do, sue a state that's already started using "revoked" copyrights and is slowly starting to treat western laws the way many people treat the "fasten the seat belt" signs?

EDIT: This turned out to be fake - sorry. Leaving the rest of the comment here for posterity.

A Russian restaurant chain "Uncle Vanya" has already filed for a trademark that looks very "inspired" by the McD arches. It is basically rotated 90 degrees and a line is added, so it looks like a "B" - which is like the letter "V" in Vanya in the cyrillic alphabet.

Source:

https://twitter.com/JoshGerben/status/1504082125968007174

https://www.washingtonpost.com/world/2022/03/18/uncle-vanya-...

Afaik that's a one month old hoax. Isnt it?

It looks like you are right. Sorry for spreading this. It was all over the news, but it seems it has later been debunked as the satirical work of a 3d artist: https://twitter.com/hoaxeye/status/1507595277859180545

The cyrillic "Щ" (a W with a tail) is pronounced Shcha, I saw a shawarma restaurant in Russia using an upside-down McDonald's double arches, in the same yellow.

It's a common joke on countless shawarma/doner/gyros/etc. stands everywhere. Not original in the slightest.

https://i.pinimg.com/originals/bc/e1/9a/bce19a4e0ca810310c07...

Shawarma joints are not the pinnacle, or even the mean, of corporate conscientiousness.

Good luck enforcing the trademark :)

Go to Taiwan to see how ostracism from the WTO order turns out: hint, Disney et al. copyrights and trademarks are universally used without fear or concern by just about everyone. What can the IP "owners" say: "We're going to sic the WTO on you!"?? The trivial answer: "We applied to the WTO and for political and diplomatic expediency they won't have us so we are not governed by the WTO"

The same will happen with Russia and western IP.

I wish more countries would do this!

Wow thatt's pretty rough. Just recently I saw some old footage of when Russia opened to the West and all those 90's kids in Russia going to the first Mc Donalds opening there.

Then again McDonalds is a good example of a lot of things that are just plain wrong about western culture... so no loss for Russia I guess.

McDonalds in non US countries is often very different from the US. Its still probably not the healthiest option, but it operates in a different market segment.

The McDonald's on the Avenue des Champs-Élysées has triple cheeseburgers which aren't usually available even in the US, but it is certainly a bit "higher class" if you will, though that may be related to restaurants in general not being as frequented outside the US (only Italy comes close apparently).

No free refills, though.

you guys must eat at McDonalds a real lot to be able to discern any difference, it's exactly the same food in slightly different shapes.

I disagree. McDonalds in the US is gross. I've had McDonalds in Europe 4-5 times and each of those were pretty OK.

(Why am I eating McDonalds in Europe? Sometimes when you get off a train and don't have your bearings yet in a place, something fast that's a known quantity is the way to go even if it pales to other options you'll find soon).

The "Here" app loaded with a country has all the McDonalds, which are guaranteed (almost always) to have a restroom and wifi. Can be worth it's weight in gold.

(I don't notice a ton of difference between USA McDonald's and other ones, though the taste can be slightly different, and I don't usually frequent McDonalds in dense urban areas in the USA.)

It makes sense that they adapt the menu slightly for each demographic. Also that they need to source meat etc in a competitive way, not from across another continent so just by that mere fact it may be slightly better (I think I'm not mistaken that US has really refined meat production to the extreme...).

McDonalds in Russia and Ukraine has historically been better in quality and taste than anywhere else in the world. When I first came to US, I was very surprised to see how dirty it is and what garbage the food is.

Regardless of what people think about McDonalds, this is a very symbolic move. People in the west remember those 90s scenes on TV of McDonalds opening in Russia, and it was symbolic of Russia opening up and a new prosperous relationship with the west. I would not be surprised if the US government nudged McDonalds to exit swiftly and publicly like this because the optics are very clear: Russia is going backwards.

Did McDonald's internationally do better over the last 20 years than it did in the US? Between 1990 and now, it seems to me that it lost a lot of cultural ground domestically, (and so did Pizza Hut, Gorbachev commercial and all). The few times I've gone into a McD's lately, every single time they've heavily pushed a "How did we do?" survey, as though they're a jilted lover wondering what went wrong. The optics in 1990 were as much for Americans as for Russians, but if it happened today, Americans wouldn't be impressed; they'd need something like opening a Chick-fil-A in Saudi Arabia.

The biggest takeaway (...) for me was the stats about how they are still growing by a decent amount. I haven't paid attention to them in a long time but

> expects... over 1,300 net restaurant additions in 2022.

suprised me.

From what I heard, at least at some time McDonalds profited more from trading real estate than from selling burgers. As in, buy a shop, wait for the district around to develop, sell the shop. So I would expect them to continue buying shops on the outskirts where cities are expanding.

For myself, I can't really imagine this whole operation with Mac selling now for some reason instead of a hundred years later—after all, presumably they still want to have burger joints in all those places. But maybe I don't understand too much about real estate.

Renault did that last month. They sold their car factories and operations building and selling more than 500,000 cars a year in Russia at a very significant profit for one rouble. The Russian state company who bought it promised that it will sell back the company for the same price when the sanctions are lifted, BUT for the "enhancements" they could make until then...

Related: A Message from Chris Kempczinski: An Update On Our Operations in Russia https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/ar...

A bit of history:

"How a Canadian Opened the First Soviet McDonald’s"

* https://medium.com/exploring-history/how-a-canadian-opened-t...

* https://www.cbc.ca/archives/first-mcdonalds-moscow-1990-1.49...

Someone should interview George Cohon:

> George Alan Cohon, CC OOnt (born April 19, 1937) is an American-born Canadian businessman who is the founder and senior chairman of McDonald's Canada and McDonald's of Russia.

* https://en.wikipedia.org/wiki/George_Cohon

I visited the USSR in 1990 and ate at that first McDonald's in Moscow. People were deliriously happy. It was a hopeful time. And such a beautiful country. The most amazing architecture; shockingly incredibly museums.

We seem to have lost those times of hope. It's tragic.

The end of the "Golden Arches theory":

https://en.wikipedia.org/wiki/The_Lexus_and_the_Olive_Tree#G...

From the Wiki entry:

> when a country has reached an economic development where it has a middle class strong enough to support a McDonald's network, it would become a "McDonald's country", and will not be interested in fighting wars anymore

It's amazing how persistent this basic idea is. "Once we reach a certain level of X, we won't fight wars anymore." X can be money, education, scale of war (WWI), etc. but the idea never proves true in the long run. Nations fight for the same reasons toddlers do, just at a much bigger scale and with far greater consequences.

it all comes back to ensuring your genes are the most likely to survive. I don't see any economic or political status changing that.

> it would become a "McDonald's country", and will not be interested in fighting wars anymore

Remind me, which country has its army continually trained and upgraded by entering one war after another for the past twenty if not forty years.

I would keep the business open, add a 20% Ukraine war fee to all sales (call it special operation fee if needed), and give it to a Ukraine war relief fund.

and have your windows smashed daily. You underestimate the power of propaganda and how people think in Russia in regards to this war.

Nah. You'll more likely get your window smashed if you gonna put some Z-swastika on it. No doubt a lot of population in Russian affected by propoganda, but primary goal of Putin's propoganda is to make people passive and not to have opinion on anything at all.

But yeah if you put anything Ukraine-related or anti-war related police will come to you immediately.

It is regular thugs — sent by officials, secret police, mafia bosses, or persons taking more than one of those positions — who smash windows 9 times out of 10. However, your logic takes unwarranted turn to “power of propaganda” and “people of Russia”, probably because there's plenty of stereotypes of how “people” in any country behave to use.

that’s not how it works

supporting Ukraine = supporting “fascist Regime” (in Russian terms)

you know what Russia does to imaginary “fascists”

they’ll nationalize McDonalds or force sell it to oligarch

same story happened to Tinkoff Bank: https://www.nytimes.com/2022/05/01/world/europe/oligarch-put...

leaving on your own gives you more leverage than having to leave at gunpoint

bet they still doin biz in china and shanghai though

Every US corpo is "I support the current thing" meme personified.

How is China even remotely similar to an aggresive fascist state of Russia?

(And can't help but notice this account has been created less than one hour ago)

China has been accused of genocide against Uyghur last year. But, they are not not expanding.

And US has invaded Middle East, which was ethically orders of magnitude worse. So what?

Oh, unlike what talking heads in your TV claims, China is much more of an enemy to the "Free World" (American Empire) than Russia is...

But they are still fighting in the economic and cultural sphere, for now.

China is an economic enemy, not a military one.

Does McDonald’s exit from Russia count as a partial restoration of the “Golden Arches Theory of Conflict Prevention” [1]?

[1]: https://foreignpolicy.com/2020/11/26/mcdonalds-peace-nagorno...

The thing that was always weird about that "theory" that there hasn't been a war between two countries that had McDonalds was even when it was created it was wrong. There was a war (depending on how you want to count a war, as it was just considered a "military action" to get rid of General Noriega) between the US and Panama in 1990. Both countries had McDonalds.

I don't really have much to add to the topic that hasn't already been said here. It will be interesting to see if this continues and what it does to Russia.

But on a tech side of things, why is the corporate section of McDonalds trying to request my location?!? Glad Safari prompted me and I blocked it but this is ridiculous.

Can anybody explain why the rouble is at a five-year high? Or is there something in the intricacies of currency pairings that means this high isn't quite like other "highs"?

It is not at a five year high though. Seems to be 10-15% down than five year high against USD.

Even the initial sanction shock has petered out as it seems oil and gas sales have been going well

market is frozen

unless you’re Russian you can’t sell assets

at the same time government purchases stocks and rouble with euros made from selling natural resources

Because it's artificially held high by Russian central bank. That's why Russians are not allowed to buy USD or gold.

Russians are in fact allowed to buy USD (provided the bank actually has the physical dollar notes). The earlier prohibition on buying foreign currency has been relaxed.

They aren’t. They can buy virtual USD, but can only physically withdraw up to $10k per year. And if they receive USD, they are required by law to deposit 80% of it within three days.

> They can buy virtual USD, but can only physically withdraw up to $10k per year.

This applies to withdrawing cash from bank accounts. AFAIK there is no limit on exchanging RUB cash into USD/EUR.

> And if they receive USD, they are required by law to deposit 80% of it within three days.

This applies to companies doing exports, not to private citizens. (Although admittedly citizens don't have many ways of getting dollars.)

(Source: I'm Russian and still follow the news from there)

On the contrary, tax was dropped for metallic (physical) gold operations in order to provide an alternative to dollar for ordinary people (whatever that means). But, given the current prices and trade rules for metallic gold (keep the documents from purchase, don’t scratch ingot, sell to the same bank you bought it from, otherwise price will be lower), it’s not a great alternative.

Besides, price of 1g of gold was around 7500 RUB when tax was dropped, and around 4500 RUB now, so, well, happy investing.

With the sanctions, imports have fallen but exports are still going strong. The Central Bank now requires all exporters to exchange at least 50% of foreign profits into roubles. So, there's a lot of demand for RUB, not so much for USD.

Russia raised interest rates to 20% at the beginning of the war to support the ruble, they also had built strong foreign capital reserves to support their currency, they've also instituted capital controls. The average person in Russia can't buy dollars, and the average person outside of Russian unable to sell any of their shares or short any stocks.

Essentially, the Ruble suffers when people flee to USD, but since both the US and Russia are preventing this, the Ruble is stronger. This is then further supported by extremely high gas prices, which allows Russia to run a trade surplus, exporting expensive oil but unable to import anything.

People are claiming this as a win for Putin - but if you look below the surface there's an obvious fact: The Ruble is only strong because no one is allowed to sell it.

It is not free traded anymore. You can't buy USD/Euro in russia, you can't use rubbles outside russia. At this point they can set it anything they want, it's not a market rate.

How is this bad news for Russia though?! MickeyDees is a thing only outside of the States nowadays.

What does 'Arching' ('de-Arching') mean in this context?

probably referring to the golden arches, the mcdonalds logo

i guess it means de-mcdonalds-izing ... gulp

The removal of the branding (the "Golden Arches").

Tearing down the big golden-arch signs and storing them securely in the Archie Bunker.

Those were the days...

Russian propaganda will use this news as a tool

they already say “we don’t need McDonalds”

No country NEEDS McDonald's.

Then where do you expect Mayor McCheese to govern?

https://mcdonalds.fandom.com/wiki/Mayor_McCheese

the difference is that for 30 years since McDonalds is in Russia, nobody said “We don’t need McDonalds”

they only left after the “special operation” started, but the propaganda will try to shift the blame and tell “whatever, we don’t need McDonalds anyways”

next thing you know: “we dont’t need bread, we don’t need bananas, we don’t need water, German cars are for fashists”, etc.

The EU is "don't need"ing Russian oil and gas for some time already. So?

Russia does. Look at how bizarrely long the queue to the first McDonalds in Moscow was.

It was after approx 70 years of Soviet regime. People had never seen anything like this before, during their whole life.

> https://www.reddit.com/r/interestingasfuck/comments/t9s0f4/r...

I guess this is also after 70 years of soviets and people never seen anything like this before?

That is when it is suddenly closing and wont be available anymore. They like McDonald and it is closing, so they all want last burgers. And even people in that queue would tell you they dont need it, they would however tell you they like it a lot.

Didn’t happen in my city, must be a Moscow thing. But yeah, that’s quite sad.

actually Russian propaganda interpreted this exact news as "McDonalds will be re-opened in mid June" [1] focusing on keeping jobs and suppliers and mentioning the rebranding

[1] https://tass.ru/ekonomika/14634951

Is Russia going to reclaim the Moon Man from the fascis…oh wait.

If only McDonald's could exit my country...

Thought they had already left. Good decision for Russia and for Russians' health, to be honest.

They halted operations like most of the corporations that "exited".

I believe they closed the stores, but kept paying their employees. That would make things easier, would they have decided to re-open.

No, this was the case until now but the point of the article is that they're selling all assets and letting everyone go. They promised to help them get employed by another company, but themselves they are pretty much quitting the country.

It's a big move for McD, they are probably the only foreign chain that actually owns most of its restaurants rather than just franchising them out.

I know there was a Russian restaurant franchise that had started buying, or least committed to buy, a bunch of locations of different Western chains.

Never heard of it.

Edit: I did hear some McD locations got 're-branded'. I'm not sure whether those were the franchised restaurants that turned or someone actually expropriated McDonalds' assets.

MCD will be back once the war or situation stabilizes. Russia is a large economy that any global company would want to be a part of.

Absolutely. Just a marketing move to help people forget they are selling cancer

I think whether they go back will depend on what the country looks like after things stabilize. If Russia comes out of this still on belligerent footing then spending resources to reestablish a presence will be extremely risky. Even if leadership changes and makes conciliatory noises I would expect things to still take some years before the world can trust it's authentic.

Indeed, I know of several companies that have said they will sell the business to a local entity, but keep the options open to come back when the situation changes.

Probably whatever oligarch buys it will buy it for cheap and will cash in big time when McDonald's buys it back, so a big cash flow to supporters of the regime...

> Russia is a large economy that any global company would want to be a part of

When companies jump the ship this soon, makes you wonder how big of an economy Russia actually is.

those companies will be replaced by Chinese equivalents before the sun goes down.

Large economy the size of Italy?

I don't think McDonalds & Co are such a big health-negative in other countries as it is in the US. I've never met someone who's obese from eating Maccas in Sweden, they're obese because they eat more calories than they burn.

Calling a food unhealty is quite silly to me, anything is unhealty if you consume it in unhealty amounts.

The above statements obviously exclude things like cyanide and other things designed to kill humans, I'd call them lethal.

IMO McDonalds was among the healthier and reliable choices when it comes to eating out in Russia. I could be reasonably sure I won't get food poisoning at a McD, for one.

Was that because McDonalds is healthier in Russia than elsewhere, or just because the rest of Russian restaurants food is even worse?

IMO Russia doesn't have a very developed culture of eating out and strong traditions of safe meal preparation, so it's really hit or miss in cafes and restaurants. Accidental remnants of plastic packaging, undercooked meat, stuff like that even if you pay mid range prices. In fact, it could be safer to eat in a cheap local diner, but you really have to know one and they generally work limited hours. Without that option I'd go for McD if there's one.

FWIW IMO this is true for many countries.

This is victim-blaming, don't you think?

You're opening for me to go off-topic and talk about drug abuse here. And my opinion is that the user is at fault for consuming unhealthy amounts of X, but that we as society should help out. (See the resemblance?) (Also note that society might have failed people and led them to abuse too, but the final decision is made by the person either way).

But closing the door for people who don't have issues with self-restraint feels like collective punishment. (Not that Maccas are in the wrong here, they can open and close restaurants wherever they want, I don't mind.)

> And my opinion is that the user is at fault for consuming unhealthy amounts of X, but that we as society should help out

We have different views here, even though I admit, I used to be ambivalent about that (and about drug legalisation) until very recently. I mean, I would certainly not criminalise drug possession and drug use like it unfortunately still is the case in my country (Romania), but I've started having very serious doubts about legalising distribution, and in so doing "normalising" said drug use.

Back to unhealthy food, unfortunately some people are too weak to resist eating above a certain healthy threshold. There were studies that blamed the food companies themselves for that, there are other people that blame the users themselves (like you seem to do), but in the end the unhealthiness wins. That's why if the unhealthy source goes away (like in this case with Russia and McDo) I see it as a positive, no matter who was at fault the rot source is gone, that's got to be good.

I don't think we soley disagree. I think it's essential to keep certain products out of the masses hands. These certain products are product with high "addictability" and high "abusabulity" (might be the same thing?). As a single example I'd put all opioids in that compartment. (There are more but I think this is one everyone agrees on)

Food on the other hand, while it's addictive it's also essential for literally everyone. I for example am such a lazy piece of shit that I haven't cooked in years, for me it would be devastating if the unhealty but calorie rich and affordable food went away.

That's an anecdote, but yes if access to high-calorie food is limited people are less likely to get/stay overweight.

Norway has a thing for this to reduce candy intake, they have a sugar tax. And while I'm not all for the government taking all my money, in a socialist society I think it makes perfect sense to tax something that'll cause a significant amount of people health issues to pay for it in advance. Same with cigarettes, they're super expensive in Norway, so that you've hopefully somewhat paid off your lung-cancer treatment once/if you get it.

There's no one size fits all for this, but there are definitely things we should keep out of peoples hands. I do not however think food is one of those.

Part of the point is that other nations have stricter regulations about what companies can and cannot do.

Companies in the US pretty much have had a free-for-all on the population.

Then who is the real culprit?

Just because you eat more than necessary doesn't make you a victim.

Afaik, McDonald is currently not that health negative in USA either. Not compared to other chains of restaurants.

>Calling a food unhealty is quite silly to me, anything is unhealty if you consume it in unhealty amounts.

>The above statements obviously exclude things like cyanide and other things designed to kill humans, I'd call them lethal.

How about sugar...?

https://youtu.be/dBnniua6-oM

You need sugar to live as far as I know, you hardly need cyanide to live. You're comparing apples to oranges.

PS: I'm not watching and hour 30m long video for you to get your point through, excessive sugar is bad yes (if that's your point).

>You need sugar to live as far as I know

Incorrect. Your body can and will convert fat into carbohydrates

>PS: I'm not watching and hour 30m long video for you to get your point through

Perhaps if you did, you wouldn't say silly things like:

>Calling a food unhealty is quite silly to me

Learning about the science of food and how different types affects people's bodies takes time

good for their gastronomy too, I for one always pities them patrons

::gulp::...I guess WWIII it is, then

What I want to know is what a Quarter Pounder burger is called in Russia:

A McPutin? A McSputnik? рояль с сыром?

This will result in less junk food for the Russians. :)

the restaurants will stay open, just under a new franchise

Has Putin not seen the fate of Beria in the film "The Death Of Stalin"? How long will it take before the Red Army takes him out into the back yard and shoots him?

Edit: Usual Putinista downvotes. Get a life. Why do you support this evil man?

And nothing of value was lost!

This actually sounds like a positive. Can they exit from Canada next?

Based on what? I'm sure they could exit anywhere they wanted, but since Canada isn't actively committing war crimes and having sanctions placed on it, what positive would come from leaving Canada?

By exiting countries they can bring down obesity rates.

Because people here are getting fat. Not as bad as America, but obesity is a problem here.

I blame the poutine.

McDonald's poutine is actually disgusting, ironically/coincidentally.

If people crash their car, should we blame Toyota? McDonald's doesn't force anyone to eat their food. If your fellow Canadians want to eat McDonald's, that's their choice. If they all stopped, McDonald's would either have to make healthier food or exit the country. But unless they're force feeding helpless Canadians food, it doesn't seem like them exiting because "people here are getting fat" is a rational suggestion.

You took my sarcastic OP way too seriously my friend.

why? I enjoy McDonalds and that they have a drive through like 5 minutes from my house. If you do not like it, why do you care about it?

Russian people: (Much like in every country) "Oh no, we wont be able to buy s*itty industrial hamburgers anymore."

I would be happy if mcD would pulled out of my counry.

You know, if you don't like it, you don't have to eat there. But other people who like McDonalds still have the option

Russia is a vassal state of china and shows the direction emperor Xi wants to go, but can't afford to. They wanted to show that dictatorships are more powerfull and efficent than democracy but even the market (inkl Mc. Donalds) showed that they aren't. I wonder if humanity will survive the next maybe indiect conflict with China...

Dictatorships are much more enjoyable for the elite and top class. Especially, when they have free access to all goods, services, and progress created in free countries.

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