HomeNewsAmazon Stops Shipping To Russia, Cuts Off Prime Video Access

Amazon Stops Shipping To Russia, Cuts Off Prime Video Access

by Chris Haney
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(Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)

Once again, another major Western company is removing its services from Russia as the country continues its invasion of Ukraine. Amazon has officially suspended all product shipments to Russia and has also cut off access to streaming service Prime Video.

The online retailer and streaming service are not major players in the Russian market. However, Wednesday’s announcement is a symbolic show of support for Ukraine as the country is still under siege. Jeff Bezos‘ company now joins other prominent U.S.-based brands like McDonald’s, Coca-Cola and Pepsi in boycotting Russia.

What You Need To Know

  • Amazon is the latest major company to remove its services from Russia.
  • They won’t ship anymore products to Russia and are cutting access to Prime Video.
  • Although Russia isn’t a major market for Amazon, the move is a symbolic show of support for Ukraine.
  • Amazon joins other prominent U.S. companies in boycotting Russia like McDonald’s, Coca-Cola, and Pepsi.
  • While Amazon won’t feel a severe impact after the removal, McDonald’s expects to lose $50 million each month while their locations are shutdown.

Amazon Shares Statement On Russia Exit

Although Amazon does ship to Russia and offer its Prime Video streaming service, there are no affiliated locations in the country. Amazon shared a statement about the company’s decision to pull out of Russia because of their attacks on Ukraine. The retailer said they have zero data centers, infrastructure, or offices in Russia. They also reaffirmed Amazon’s long-standing policy of refusing to do business with the Russian government.

“We’ve suspended shipment of retail products to customers based in Russia and Belarus,” Amazon shared in the statement.

“We are also suspending access to Prime Video for customers based in Russia,” the company added. “And we will no longer be taking orders for New World, which is the only video game we sell directly in Russia.”

Additionally, the company doesn’t have any dedicated online stores for Russia. However, buyers in the country could get products shipped to them from Amazon’s outpost in Germany before the ban. Further, the retail giant’s on-demand cloud computing platform, Amazon Web Services, also halted all sales in Russia.

McDonald’s Temporarily Closes 847 Stores In Russia

On Wednesday, another major U.S. brand shared details about their decision to suspend operations in Russia. McDonald’s announced that the temporary closure of its 847 restaurants in Russia will have a huge impact on business. In fact, each month the fast-food chain keeps its doors closed in Russia will cost McDonald’s around $50 million per month.

Amazon and McDonald’s both joined numerous other major American brands in boycotting Russia. Pepsi, Coca-Cola, KFC, Papa John’s, and Starbucks each halted business in Russia earlier this week. Even though McDonald’s is shutting down all Russian operations, the company will still pay all of its 62,000 employees. The fast-food chain is responsible for and runs 84% of its Russian locations.

McDonald’s Chief Financial Officer Kevin Ozan spoke about the decision on Wednesday during a UBS conference. He said that other costs will come from leased sites and supply chain operations.

“This is a really challenging and complex situation for a global company like us,” Ozan said.

Other Brands Facing Financial Losses After Halting Business In Russia

Yesterday, Papa John’s disclosed that it may have to absorb $15.2 million in costs for receivables linked with its master franchisee in Russia. The franchisee runs each of Russia’s 188 Papa John’s stores in the country. However, those stores’ royalties made up only 1% of Papa John’s total 2021 revenue, the company shared.

The global pizza chain also confirmed that it has stopped all operational, marketing, and business support within the Russian market. The Russian franchisee owns and operates its own supply chain. Therefore Papa John’s will receive zero royalties at this point from its Russian restaurants.

In addition to Papa John’s, Kentucky Fried Chicken‘s parent company is issuing similar operations closures in Russia. For now, Yum! Brands Inc. is suspending 70 of its more than 1,000 KFC restaurants in the country. The majority of KFC’s locations in Russia are owned by franchisees and licensed partners. That complicates the matter significantly as the company shows support for the Ukraine crisis.

Yum! Brands also owns Pizza Hut, which is finalizing an agreement to also suspend their operations in Russia. Pizza Hut only has 50 locations in Russia, but the agreement would halt all business at every location. As a further sign of support for Ukraine, the company will also donate any profits from its Russian operations to humanitarian efforts.

“Yum! Brands is suspending operations of KFC company-owned restaurants in Russia and finalizing an agreement to suspend all Pizza Hut restaurant operations in Russia, in partnership with its master franchisee,” the company recently shared.

Outsider.com