Renault, LVMH, Publicis, Legrand, Chanel or even CMA-CGM… In the first weeks of the conflict in Ukraine, a certain number of French companies wanted to make it known that they were leaving Russia.
For some of them it was a real sacrifice both because of the economic weight that Vladimir Putin’s country represented in their activity and because of the history that linked them to the country.
Pointed out by associations and accused of supplying the army through subsidiaries, TotalEnergie took longer to react. But in the end, the French giant dumped a series of assets totaling $14.4 billion in impaired assets. However, he retains stakes in the Novatek gas company (19.4%) and the Yamal LNG gas project (20%) which he says he cannot undo.
A true Eldorado of the 1990s, Russia then represented a market of almost 150 million inhabitants (more than France and Germany combined) avid for consumption and a Western lifestyle.
Between the fall of the Soviet Union in 1991 and the start of the war in Ukraine, some 700 French subsidiaries, including 35 CAC 40 companies, were established in Russia, according to the Ministry of Economy. Companies that have sometimes become leaders in the country, such as Renault with its Avtovaz (Lada) brand, Leroy-Merlin in DIY, Bonduelle in canned vegetables or even Decathlon in the sale of sporting goods.
No mass exodus from Russia
One year after the start of the conflict, where are we? The first observation that can be made and that concerns all countries, is that there has not been a mass exodus of Western companies for a year. According to Swiss researchers Simon Evenett (University of St. Gallen) and Niccolò Pisani (IMD Lausanne), only 8.5% of EU and G7 companies had sold at least one subsidiary by the end of 2022, i.e. 120 companies in total compared to 1284 that continue to operate.
Of these 120 companies, the Americans take the lion’s share (25% of the total) ahead of the Finnish (12.5%), the Germans (11.7%) and the British (10.8%). French companies only occupy the 5th position with 7.5% of the total.
That said, the weight of France in the 1,284 companies that remained in Russia and counted by the researchers is even less. German companies represent the largest contingent of Western companies present in Russia (19.5%) ahead of Chinese, American (12.4%), Japanese (7%), Italian (6.3%), British (5 .8%) and finally French (5.6%). %). This represents approximately 70 French companies still present in Russia.
However, the situation of companies is more complex in most cases. This is detailed in a study by the American Yale University, which makes a real-time inventory of the situation of large companies in Russia.
She classifies them into five categories:
A: they withdrew
B: they have suspended their activity but can resume it
C: reduced some activities but continued with others
D: They postponed some investments but continued their activity
F: they have not changed anything in their activity
23 French companies continue their activity
We thus see that 16 French multinationals are classified as A. This is the case of Air Liquide, Atos, L’Occitane, Renault, Société Générale and Sodexo. They completely abandoned Russia and gave up their assets there.
19 are classified B such as Michelin, Pernod Ricard, Hermès, Kering, Danone or Decathlon. But the latter would definitely seek to sell its activities.
But it is in the last category, F, that they are the most numerous. There are 23 in the census conducted by the American university. Some cases are known, such as those of Auchan, Bonduelle, the group of Savencia cheeses or even Lactalis. These companies claim to stay in Russia to “feed the people,” as the CEO of Lactalis explained to BFM Business last year.
But for other companies, maintaining a presence is more surprising. This is the case of the sporting goods manufacturer Babolat, the lingerie seller Etam, the ready-to-wear brands Lacoste or Cacharel, the pen manufacturer Bic or many companies that operate in beauty salons or hairdressers such as Clarins, Provalliance (Jean -Louis David), Mod’s Hair, Dessange or Camille Albane.
These companies are not illegal. The French government has not given clear instructions on the withdrawal of French companies from Russia. The executive does not want to embarrass the hexagonal groups despite the fact that the country has become the second largest investor in Russia in recent years.
No directive on the EU side either. While the Commission has listed a series of products prohibited for export (advanced technologies, aeronautics, luxury cars, energy equipment, etc.) and has decreed an embargo on numerous raw materials (hydrocarbons, steel, gold, cement… ), does not prohibit a European capitalist presence on Russian soil.
The general principle is not to trade in products that may have both civilian and military use.
suspicions of complicity
But since the partial mobilization decreed last September by Vladimir Putine, the presumptions of complicity with the mode are multiplying. Russian law obliges multinationals to comply with the requirements for the supply of materiel for the military in particular.
The ninth package of European sanctions has also expanded the list of products affected by the marketing ban. It is for this particular reason that the Legrand electricity supply group finally ceased its activity in Russia last January.
Gray areas remain, such as everyday consumer products that are not affected by the sanctions but could be supplied to the Russian military. In recent weeks, suspicions have thus weighed on Bonduelle and, more recently, on Auchan, accused by NGOs or on social networks of having participated in product collections for Russian soldiers in Ukraine.
Allegations denied by both groups. Bonduelle described reports that Christmas baskets of food had been delivered to Russian soldiers as “fake news.” Auchan for his part denies that he would have knowingly carried out a collection of products for the Russian army in March 2022.
Another Mulliez group distributor is being targeted by NGOs. This is Leroy-Merlin, whose team products were photographed on the Russian front. The company, which is classified in the category of companies that have ceased their expansion in Russia, would also have continued with works, specifically one until last November east of Moscow.
The latter defends itself by claiming to want to protect its employees by continuing to provide them with work. Leroy-Merlin was one of the three most exposed international companies in Russia before the war. In 2021, it had generated more than 18% of its global turnover there.
Source: BFM TV
