McDonald’s shuts down in Crimea

KIEV-

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 business.

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 in Crimea.”

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 guaranteed.

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 foreign investors.

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. [ID:nL5N0MV2WL] 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 neighbors, 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 neighbors, an option that would mean reversing flows in transcontinental pipelines.