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          Businesses Wonder Who's Next After Russia Targets McDonald's

   by Reuters

   Russia said on Thursday it was investigating dozens of McDonald's
   restaurants, in what many businessmen said was retaliation for Western
   sanctions over Ukraine they fear could spread to other symbols of
   Western capitalism.
   Russia's food safety watchdog said it was looking at possible breaches
   of sanitary rules at McDonald's, but many in the business community
   said it was a reflection of the deterioration in relations between
   Russia and the West over Ukraine, where pro-Russian separatists in the
   east of the country are fighting against government forces.

   "Obviously, it's driven by the political issues surrounding Ukraine,"
   said Alexis Rodzianko, President and CEO of the American Chamber of
   Commerce in Russia.

   "The question on my mind is: Is this going to be a knock on the door,
   or is this going to be the beginning of a campaign?"

   Russia earlier this month slapped bans on Western food imports after
   Washington and Brussels imposed economic sanctions in response to
   Moscow's annexation of Ukraine's Crimea region and its backing of the
   separatists.

   In a sign of growing frustration at the threat to trade, several
   mid-tier Russian businessmen signed off on a letter by British
   entrepreneur Richard Branson calling on politicians to stop the
   conflict.

   "We, as business leaders from Russia, Ukraine and the rest of the
   world, urge our governments to work together to ensure we do not
   regress into the Cold War misery of the past," the letter said.

   McDonald's, which opened its first store in Russia in the dying days of
   the Soviet Union in 1990, is a very visible symbol of American
   capitalism in Russia, where it now has 438 branches.

   The food safety watchdog ordered the closure of four of its restaurants
   in Moscow on Wednesday, including that first Russian branch, which is
   the busiest in the firm's global network.

   The watchdog said on Thursday it was starting unscheduled checks in
   several Russian regions, including Sverdlovsk and Tatarstan in the
   Urals, the central Voronezh region and the region around the capital.

   "We are aware of what is going on. We have always been and are now open
   to any checks," a McDonald's Russia spokeswoman said.

   Vulnerable businesses

   So far no other prominent Western brand has reported coming under extra
   scrutiny from the Russian authorities, though there were Russian media
   reports that Jack Daniels was being investigated. The whiskey producer
   said it would challenge any accusations about its quality.

   Amrest, the Warsaw-listed holder of the Russian franchises for several
   other iconic U.S. brands -- Starbucks, KFC, Pizza Hut and Burger King
   -- said last week it had experienced no problems and was doing well.

   "We are monitoring closely recent geopolitical developments, to make
   sure we can adapt to changing conditions and minimize business risks,"
   said AmRest's chairman Henry McGovern during a teleconference with
   investors last week.

   Nevertheless, big foreign brands are viewed as vulnerable.

   French bank Societe Generale published on Thursday a research note
   saying companies generating most revenues in Russia and therefore most
   exposed to political risks were BP , British American Tobacco, BASF,
   Carlsberg, Coca-Cola, Alstom and E.ON.

   Even some of McDonald's rivals came to its defense.

   "This is a major blow to relations between the two countries," Mikhail
   Goncharov, the owner of Russian fast-food chain Teremok, told RBC
   Daily, a newspaper.

   "Even the Soviet Union was maintaining those relations because the
   first McDonald's opened during the USSR times, and PepsiCo factories
   continued to function regardless of political crises," he added.

   Since McDonald's first broke into Russia, it has for many Russian
   consumers been overshadowed by hundreds of swanky French and Japanese
   restaurants in the Russian capital, but it remains a powerful symbol,
   and therefore a prominent target.

   On Thursday, outside the shuttered restaurant on Moscow's Pushkin
   Square, the closure stirred patriotic sentiment among some people.

   "They occasionally kick us with different sanctions. Why can't we do
   something in return? Moreover, McDonald's is such a symbol of
   everything Western, I think it is a good symbolic step that shows that
   we have some teeth," said Ivan.
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   sinesses-wonder-whos-next/2423232.html

References

   1. http://www.voanews.com/content/reu-after-russia-targets-mcdonalds-businesses-wonder-whos-next/2423232.html