WAR IN UKRAINE – “Values are worth more than profits”. Volodomyr Zelensky expressed himself by videoconference, this Wednesday, March 23, in front of French deputies and senators. And he did not forget to point the finger at the large French companies with an economic presence in Russia.
Not all of them were mentioned, but the Ukrainian president chose to name three: “French companies must leave the Russian market. Renault, Auchan (Mulliez group), Leroy Merlin and others, they must stop being the sponsors of Russia’s war machine”, he repeated before the national representation. “They need to stop funding the murder of children and women, rape,” he also said.
A strong presence in Russia for these groups
Renault has had a strong presence in the Russian market since 2012 through its takeover of the AvtoVAZ group, which manufactures Lada cars, the country’s number one car market with nearly a third of sales. Russia is also the second international market for the French manufacturer. Renault is all the more exposed as it is associated in Russia with the Russian public conglomerate Rostec, directed by Sergei Tchémezov, an ally of Vladimir Putin.
The diamond brand is not the only one in this case: the distributors of the Mulliez group (Auchan, Decathlon) or even Leroy Merlin are also well established in the country headed by Vladimir Poutine since 2000. For the DIY specialist Leroy Merlin, Russia, with 36,000 employees and 107 stores in 62 cities, is the second largest market behind France and represents more than 18% of its activity.
Employees of the Ukrainian branch of Leroy Merlin asked the brand on Monday to cease its activities in Russia after the bombing of a store of the group in kyiv.
As for Auchan, it has 30,000 employees and 231 stores in the country, where the brand generated 3.2 billion euros in turnover in 2021 – or around 10% of its income. The sports brand Decathlon operates no less than 60 stores there.
For the moment, the Mulliez group like Renault are trying to keep a low profile on the subject and do not speak officially. Internally, the distributor would have explained to French employees “having made the choice not to leave Russia in order to continue to pay salaries and provide food” to the population, reported CFDT union representative Gilles Martin on Monday March 14.
Total promises to distance itself
Since the start of the war on February 24, however, not all French groups have remained without taking action, but the position taken most often depends on the size of their investment and their local market.
The hydrocarbon giant, Total, has announced on Tuesday March 22 the end of the purchase of Russian oil by the end of 2022. A “strong decision” which he explains having taken responsibility and not under “pressure”, especially political. “You can’t make hasty decisions without knowing what the consequences are. For us, the question was whether we could replace this Russian oil”, detailed the leader.
Luxury groups such as Hermès, Chanel, LVMH and Kering have announced “temporary” closures of their stores. If Russia may appear to be a land of choice for luxury, it would actually represent only a small part of their turnover: barely 1% according to Kering or Burberry, 2% according to LVMH.
On March 6, the French agri-food group Danone indicated that it would continue its activities in Russia, where it generates 5% of its income and employs 8,000 employees, but suspend all investment in the country.
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