Last month, Oksana Lozynska stood in her small grocery and restaurant on Seattle’s Aurora Avenue and told a reporter of her growing fears as Russian forces massed on the borders of her Ukrainian homeland, where she still has family.
This past week, just days after the Feb. 24 invasion, Lozynska launched her own modest counterattack.
On Tuesday, she and her son, Grygoriy Lozynskyy, pulled all Russian products off the shelves of their specialty store, European Foods. Lozynska will sell off some of the items, among them Russian chocolates and grains, and donate the proceeds to Ukrainian charities. But others, like Russian beer and sparkling wine from Russian ally Belarus, will go in the trash. After that, Lozynska won’t stock any Russian or Belarusian products, says Grygoriy, 24, who translates for his mother.
The protest will be costly — Russian and Belarusian products account for half their sales. But Lozynska feels she has no choice, says Grygoriy, who points to a recent statement by Ukrainian President Volodymyr Zelenskyy: “He said if you’re selling or buying Russian products, you’re supporting Russia.”
European Foods is just one of hundreds of businesses in Seattle and across Washington state trying to navigate this escalating geopolitical crisis 6,000 miles away.
Ever since the invasion, many companies in Washington — from tiny specialty food shops to global megafirms such as Microsoft and Boeing, as well as farmers and other producers — have grappled with difficult choices and massive uncertainty.
Like Lozynska, many local businesses have stepped up with donations to relief efforts for Ukraine. But many are also facing significant costs associated with the conflict.
For many companies, the invasion and associated sanctions against Russia are yet another blow to a global supply chain still hobbled by the pandemic, and likely mean more delays and inflation in everything from gasoline to grain.
After two years of COVID, “many supply chains have no capacity or inventory buffers,” said Apurva Jain, an associate professor and supply chain expert at the University of Washington Foster School of Business.
Nearly 30% of global wheat exports originate in Russian and Ukraine, according to media reports, and Seattle-area bakers and distributors are already bracing for a jump in flour costs after the price of future wheat contracts soared to an all-time high this week.
A price surge “typically happens two weeks after you see the big spike in the news,” says Todd Biesold, co-owner of Merlino Foods, a Seattle-area food service distributor, who says flour prices, already up nearly 30% from 2019, could easily jump another 20%.
Other commodities are at risk. Boeing, for example, relies on a Russian company, VSMPO-AVISMA, for about 35% of the titanium used in Boeing airframes, notably the 787 and 777 widebody aircraft, according to aerospace supply chain expert Kevin Michaels. Replacing that capacity, he said, could take years.
Washington farmers and other food exporters could also see impacts. In 2014, the state saw food shipments to Russia — mainly seafood — cut dramatically due to sanctions that followed the 2014 Russian annexation of Crimea. Last year, Washington exported just $1.9 million in food products to Russia, down from $104 million in 2013, according to the state Department of Agriculture.
This time, Washington could lose some of its agricultural exports to Ukraine, which bought $67 million last year, although “right now it’s just too soon to say what those impacts will be,” department spokesperson Hector Castro said.
The war has also complicated operations for local businesses with significant commercial connections to Russia and Ukraine. Boeing and Microsoft, which have employees in both countries, say they’ve taken steps to ensure those workers’ safety.
But local companies are under growing pressure to punish the government of Russian President Vladimir Putin by pulling out of any Russian operations, investments or business dealings.
Gov. Jay Inslee not only ordered the state to sever ties to Russian entities and divest from Russian companies, he also urged private businesses in Washington to follow suit.
That plea has been echoed by state and local political leaders, everyday consumers and by members of Washington’s large Ukrainian American community. “Absolutely, we have to cut Russia from any source of money that they can get,” said Liliya Kovalenko, president of the Ukrainian Association of Washington, which is lobbying businesses and local and state governments to sever ties with Russia.
Some Washington businesses already cut or reduced those ties as part of a growing boycott movement across the United States, Europe and other parts of the world.
On Tuesday, Boeing said it was suspending parts, maintenance and technical support services for Russian airlines — a move that was mirrored Wednesday by European rival Airbus.
That same day, Seattle-based travel company Expedia said it had “ceased the sale of travel into and out of Russia” in response “to recent acts and government-imposed sanctions weighed against Russia.”
On Friday, Microsoft said it was halting all new sales of products and services to Russia. The Redmond-based software, gaming and cloud-services giant, which had already been using its technology to thwart cyberattacks against Ukraine by suspected Russian actors, said on Monday that it was taking other measures, including banning from its platforms all ads and content from government-affiliated Russian news sites such as RT and Sputnik, and deranking those Russian sites in its Bing search results.
The steps are intended to “reduce the exposure of Russian state propaganda, as well to ensure our own platforms do not inadvertently fund these operations,” said President and Vice Chair Brad Smith in a Monday blog post. Similar moves have also been announced by Google and Apple.
Kroger, which owns QFC and Fred Meyer, said it had taken Russian-produced vodka off the shelves last weekend, according to spokesperson Tiffany Sanders.
That was welcome news to Seattle resident Michael Ragsdale, a retired videographer who spent a day ringing up local grocery stores and asking them to stop carrying Russian-made vodka and other products.
As a consumer thousands of miles from the war, “I said to myself, what can I do?” Ragsdale said. “Maybe I can call some stores and get them to drop the vodka.”
Others local companies have taken measures that are arguably more modest.
Starbucks has no business operations in Ukraine, but does have 130 licensed Starbucks locations in Russia that are wholly owned by a “licensed partner,” according to letter sent to employees Friday by CEO Kevin Johnson.
Johnson made no mention of whether the locations would remain open, but told employees that Starbucks “will donate any royalties we receive from our business operations in Russia to humanitarian relief efforts for Ukraine.”
Amazon has no data centers, offices or permanent staff in Russia or Ukraine, according to an emailed statement from a spokesperson for the Seattle-based online retailer and cloud computing provider. But as of Friday afternoon, Amazon officials hadn’t commented on whether the company has other business operations in or with Russia, or whether those operations would be affected by the war.
The uneven response among local companies underscores the challenges of business boycotts in an interconnected global economy, said Lawrence Parnell, an expert in strategic public relations at George Washington University.
Boycotts against Russia by high-profile firms such as Apple and BP have created a “bandwagon effect” for a global boycott, Parnell said. Yet some companies’ products and services may be so deeply integrated into the Russian economy, and so tightly controlled by contractual obligations, that it’s “sometimes not that easy to turn it off,” Parnell said.
Case in point: Microsoft’s move to stop new sales to Russia doesn’t appear to affect products that the Russian government and other customers have already purchased and may still be using — although the company left room for tougher measures. “We will take additional steps as this situation continues to evolve,” Smith, Microsoft’s president, said in statement Friday.
Microsoft’s latest decision is “kind of a compromise strategy,” says Parnell. “Is that going to convince people that Microsoft is doing the right thing? It’s going to depend on their on their point of view, I guess.”
Maksym Kovalenko, husband of Liliya Kovalenko and a board member of the state Ukrainian Association, thinks Microsoft’s actions are a good start. “Any steps that break economic relationships with Russia [are] good for the world,” he said, adding that “people can push for additional steps” from Microsoft.
For many smaller businesses, deciding how far to go in their own Russian policies is also proving difficult.
Several Seattle-area specialty retailers worried that boycotting Russian products would not only be financially painful for them, but also could inflame tensions among the local communities of Eastern Europeans, where emotions are already running high over the conflict.
“We don’t want to offend,” said the owner of one Seattle-area grocery that specializes in Eastern European products who asked not to be identified, in part to avoid losing customers, as happened during an earlier international conflict.
At one Seattle-area Ukrainian shop that stopped selling Russian products, the owner was all but called a “Nazi” by Eastern European customers, said Father Andriy Matlak, a priest at the Ukrainian Orthodox Church in Seattle’s Madrona neighborhood. “The temperature will rise with this, and the hate,” Matlak said.
At another Washington state European grocery, the manager, whose family is Ukrainian, spoke of the stress of trying to balance their anger at Russia with their fear of alienating customers or even their own employees.
“I had to change schedules so that some employees don’t work together because there’s just so much tension,” said the manager, whose staff includes Ukrainian Americans and Russian Americans.
The manager, who asked not to be identified because of the sensitivity of the subject, said some of the staff think “there’s no war going on” and that war news is just “propaganda,” while other employees “just can’t stand hearing that because their loved ones have either died or are under attack.”
The manager raises another hard question, one that hangs over all conversations about boycotts: Will cutting off Russian products hurt ordinary Russians who have little say over military policy?
“I don’t know if it’s necessarily right to punish them for something that they have absolutely no control over,” says the manager. “This is Putin’s war, not Russia’s war.”
Back at the European Foods, Lozynskyy said he and his mother are braced for a long campaign.
Although their boycott is getting support from many customers, including some Russian Americans, they expect pushback from others, especially those who get their news from state-controlled Russian sources. They also know they’ll lose some business to shops that aren’t boycotting Russian products.
For now, Lozynskyy and his mother are confident they can endure. Since his mother bought the shop, in 2019 (from another Ukrainian American), they’ve weathered COVID, pandemic shutdowns, several break-ins and some vandalism.
“We survived two and a half years — I’m sure we can survive this,” Lozynskyy says. “We’re like the Ukrainians that stand their ground. … We’ll do whatever it takes.”