Apple, Nike and Hollywood spurn Russia, isolating Putin

Now the nation of 145 million is losing many of the world’s most iconic brands. 
Image: Janos Kummer/Getty Images

Russia’s invasion of Ukraine last week brought global condemnation, trade restrictions and financial penalties. Now the nation of 145 million is losing many of the world’s most iconic brands.

Apple Inc. and Nike Inc. both announced plans Tuesday to halt product sales in Russia, cutting off the country to the most valuable technology company and the biggest maker of athletic wear. That followed Hollywood studios such as Walt Disney Co. and WarnerMedia pausing releases of new films in the nation — including “The Batman,” which is hitting US theaters this weekend and expected to become one of the highest-grossing movies of the year.

Taken together, the moves reflect a cultural and commercial split unseen since the Cold War ended in the late 1980s. From the iPhone to Air Jordans, highly prized US brands are vanishing from the Russian marketplace in a way that will be hard for consumers to ignore.

Exxon Mobil Corp. continued the exodus on Tuesday, saying it will “discontinue” its Sakhalin-1 operations in Russia. Energy was specifically excluded from initial sanctions announced last week by the US and Europe, but pressure has been growing to cut ties.

In Apple’s case, the move follows a recent expansion in Russia. The company had registered a business office there in the past few months and posted job listings for about half a dozen positions in Moscow. But President Vladimir Putin’s aggression in Ukraine brought a quick policy shift. In addition to ceasing product sales in the country, Apple is removing the RT News and Sputnik News applications from App Stores outside of Russia.

“We are deeply concerned about the Russian invasion of Ukraine,” Apple said Tuesday. “We are supporting humanitarian efforts, providing aid for the unfolding refugee crisis, and doing all we can to support our teams in the region.”

Around the same time, Nike said it would be cutting off Russia as well, though it blamed logistics. The athletic wear giant said it “cannot guarantee delivery of goods to customers in Russia.” Nike didn’t immediately respond to a request for comment.

United Airlines Holdings Inc., meanwhile, pledged Tuesday to stop flying over Russia for its daily flights to India, making it the last major US passenger airline to withdraw from the airspace.

American Airlines Group Inc. and Delta Air Lines Inc. already said they stopped flying over Russia, shifting routes linking US cities to destinations such as Tokyo and Incheon, South Korea.

Beyond concerns about the invasion, operating in Russia has become very challenging for outside companies. With sanctions mounting, the ruble plunging and the US banning transactions with the Russian central bank, deciding to pull out of the country has become an easier choice.

And it’s not just US brands leaving. BP Plc said this week that it would exit its 20% stake in Russia-controlled Rosneft, a move that could result in a $25 billion write-off and cut its global oil and gas production by a third. Shell Plc followed suit, citing Russia’s “senseless act of military aggression.” DaimlerTruck Holding AG, one of the world’s largest commercial vehicle manufacturers, also is halting its business activities in the country.

But losing Apple was seen as a particular blow for Russia. When Ukraine Vice Prime Minister Mykhailo Fedorov urged the company to stop sales in the country, he said it could turn Russia’s young people against the war.

He also called on Apple to shutter its local App Store — a step the company hasn’t yet taken. Apple has operated an online store specific to Russia for the last several years, as well as an App Store tailored to the country.

HP Inc., the largest supplier of personal computers to Russia, also stopped exports to the country this week. Ford Motor Co. joined the pullout as well, saying Tuesday that it was “deeply concerned about the invasion.”

The war itself may be entering a new phase. Early signs suggest Russian commanders are preparing to redouble attacks against Ukraine’s capital, Kyiv, after initial lightning strikes failed to make headway.

Apple said it will continue to evaluate the situation and that the company is in communication with governments on the actions that it’s taking. “We join all those around the world who are calling for peace,” the company said.

© 2022 Bloomberg

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