McDonald's in firing line as Russia retaliates

Moscow's oldest McDonald's outlet, opened in 1990, has been closed down. Photo / AP

Russia widened investigations into McDonald's restaurants in what looks like a tit-for-tat retaliation against American interests after the West imposed sanctions over Ukraine.

Russia's food safety watchdog said it was looking at possible breaches of sanitary rules at McDonald's as it shut down four of its fast-food restaurants in Moscow.

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 are fighting against government forces.

In a separate move, the Virgin founder Sir Richard Branson called for a "peaceful resolution" of the Ukraine crisis in an open letter signed by business and cultural figures from Russia, Ukraine and the West.

Unilever's chief executive, Paul Polman, the Nobel Laureate Muhammad Yunus, PayPal co-founder Max Levchin and former eBay president Jeff Skoll joined Sir Richard in his call for "conversations, not armed conflict" over Ukraine amid concern about the impact on trade of a prolonged stand-off between Russia and the West.

Russia's move against McDonald's alarmed US business leaders. Alexis Rodzianko, chief executive of the American Chamber of Commerce in Russia, said: "Obviously, it's driven by the political issues surrounding Ukraine. 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?"

In a note to clients, the French bank Societe Generale warned that the companies generating most revenues in Russia, and therefore most exposed to political risks, are British American Tobacco, BASF. Carlsberg, Coca-Cola, Alstom and E.ON.

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

The country's food watchdog is now stepping up its probe of McDonald's, as it embarks on unscheduled checks in several Russian regions, including Sverdlovsk and Tatarstan in the Urals, the central Voronezh region and the regions 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.

- Independent