As Russia Says Goodbye to Big Macs, Resale Prices of Last Products Skyrocket
These days in Russia, if you want to get a Big Mac, you’ll need to go on Avito and pay up to roughly $36. The absolutely ridiculous pricing, of course, is a result of the decision by McDonald’s (NYSE: MCD) to temporarily shutter its operations within the country in objection to the invasion of Ukraine.
The fast-food giant announced last week in a memo from CEO Chris Kempczinski that it will be temporarily closing its 850 stores and pausing its operations in Russia as the McDonald’s System joins the world “in condemning aggression and violence and praying for peace.”
Just like at the opening of the first McDonald’s in Russia 32 years ago, people flocked to stores for the flagship Big Mac. This time they lined up for one last Big Mac for an indefinite period of time.
Some patrons took advantage and stocked up on their favorites, while many have decided to resell menu items and packaging on Avito, Russia’s version of Craigslist.
The prices for the listings posted on the site vary greatly. One St. Petersburg seller posted combo sets for a whopping $225, plus an extra $9 for each piece of packaging. According to The Economist’s Big Mac Index, a Big Mac in Russia normally costs ₽135 or $1.22.
Among global companies suspending their operations in Russia, McDonald’s is the one with the most number of stores and employees. But according to Kempczinski’s memo, their 62,000 employees will continue to receive their salaries.
Russia’s workaround
In a report from Washington Post, Russia issued a decree that removes patent protections for companies linked to countries deemed hostile to Russia, effectively legalizing patent theft, and creating an opportunity to reopen operations for global giants like McDonald’s without the company’s permission. Of course, this does nothing for the supply chains that are likely to fall apart in such situations and may limit the true-to-form reproduction of such products.
This move will likely impact Russia’s relationship with Western investors long after any de-escalation of the war in Ukraine.
Information for this briefing was found via Twitter, Avito, Reddit, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
