The Finnish parliament will no longer carry Pepsi products as the American soft drink giant continues to support the Russian economy by continuing its operations in the aggressor country, Finnish news outlet Yle reported on Sept. 5, citing the manager of the parliament’s restaurant.
I have a genuine question that maybe somebody with more economic knowledge can educate me in:
How is continuing the sale in Russia helping Russia? As I understand Russia is gaining money on the sales taxes, etc. but the rest of the earnings will go to the US parent company, which cannot be taxed directly by Russia. If Pepsi backs out, wouldn’t operations just be replaced by a rebranded russian company, where all of the earnings would be under russian “sphere of influence”?
I genuinely do not understand why Pepsi backing out is considered bad for Russia. I thought countries generally prefer national companies over foreign ones.
Your question is basically “why are embargoes effective”
Collectively shunning an economy cripples it, and it’s most effective when widely adopted.
Pepsi should be ashamed of their actions.
My question was more specific than that. I absolutely understand why it is important to sanction high-tech products and stop Russia from exporting their goods.
But western companies selling non-critical goods inside Russia felt more like russian economic dependancy to western companies to me, which (for me as a layman when it comes to economy) seemed preferable to Russia having an independent economy. Thats where my question came from.
Now I realized that rather than “dependant economy” or “independant economy” the intended goal in this case is “no economy”, although i am doubtful whether that will really work.
Because Russia companies can’t make Pepsi products, they just don’t have the supply chain to get the flavor right. They can, and do make similar products already, it’s just Mountain Dew is way better than off brand Mountain Dew. If the Russian consumers wanted that, they would have been buying it already.
I for one would never drink a cola that is not coca cola. Soda is a luxury, and in my opinion no other cola has the flavor profile to be worth the calories. Some people feel the same way about Pepsi, and a massive amount of people feel that way about Mountain Dew and other Pepsi products.
How’s that been working for Russia? Hasn’t their manufacturing PMI been shooting up? Isn’t inflation actually higher than desired because their economy is red hot?
Lol.
No.
The rubble has fallen to the value of approximately one penny.
That’s the cause of their inflation: because their currency is worthless.
You’re right, it doesn’t matter.
A sanctioning country can get good results from doing its thing to a sanctioned country when the stuff being sanctioned is important to their development. That’s why the us wants to keep 5g chips out of chinas hands.
E: touching finger to ear I’m receiving reports this did not work at all.
A set of sanctions doesn’t matter when the thing that’s being kept out of the sanctioned country’s hands isn’t important. So naturally when in a war no one cares about specific brands of soda or fast food. Pepsi executives saw what happened to McDonald’s and stayed in.
People will say things like “it hurts their economy” and “it makes the people unhappy”. The American experience of war is so completely different than almost every other nationality that they think that makes sense, and the American experience of a war economy is so far beyond the cultural memory that it only reenforces the idea that specific brands of soda matter in wartime.
So basically you’re right, what Pepsi does doesn’t matter. But if we as consumers of Pepsi outside the conflict wished it had a better policy, one that put its weight on the scale to end the fighting, we should wish for it to stop supplying both nations and perhaps even any nation directly supporting either one.
Turns out, keeping 5G chips out of China’s hands didn’t work out too well. Do people just happen to forget that Huawei isn’t exactly some young naive kid in the telecommunications space?
The whole thing was bait to get the most advanced Chinese companies to make the chips they’d otherwise have gotten from tsmc so they could be sanctioned by the west directly and lose their lucrative western contracts.
Jokes on America though, between china throwing state money at contracts to create internal production and brics+ picking up the slack it’s gonna be just fine for em.
Tfw u sink semiconductor reshoring before it even gets off the ground.
Huawei was already sanctioned to shit, though… And a lot of the other big consumer tech companies are technically headquartered in Taiwan.