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April 8, 2022

Moscow raises subsidies to entice local fast food chains

A number of global fast food chains suspended operations in Russia in response to the military offensive against Ukraine.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict.

Moscow has increased its support for regional fast food chains following the exodus of major foreign brands in response to the military invasion of Ukraine, reported Reuters, citing a city spokeswoman.

The state has doubled the support offered to fast food chains to set up new restaurants to $63,000 (RUB5m), according to the report.

The authorities have also increased the total funds in the support programme to RUB1bn after 17 Russian companies, including pancake chain Teremok, sought the funds for expansion in the city.

Russian meat producer Miratorg, which operates its own burger houses, also approached the authorities for funding.

The chain is seeking to set up 30 or more new units in addition to its initially planned 15 openings this year, a spokeswoman told the news agency.

A numer of global fast food chains suspended their operations in Russia over the Ukraine crisis.

Last week, Italian restaurant company Eataly decided to dissolve its operations and cease its franchise agreement in the country.

Last month, Burger King halted corporate support for franchised restaurants and suspended its operations, marketing and supply chain activities in the country.

The burger chain, owned by Restaurant Brands International, also said that it will not approve any investments or expansions in Russia.

Earlier in March, US-based pizza restaurant chain Papa John’s and Yum! Brands, the parent company of KFC, also announced a similar stance.

Online food-ordering and delivery platform Grubhub discontinued its alliance with Russian driverless robot developer Yandex shortly after Russia began its military attack in Ukraine.

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