WAR IN UKRAINE – “Values are worth more than profits.” Volodomir Zelensky was expressed by videoconference, this Wednesday, March 23, in front of French deputies and senators. And he did not forget to point the finger at the big French companies with an economic presence in Russia.
Not all 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 must stop being the sponsors of Russia’s war machine”, he reiterated 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 the acquisition of the AvtoVAZ group, which makes Lada cars, the country’s number one car market (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, run by Sergei Tchemezov, 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 Putin since 2000. For the DIY specialist Leroy Merlin, Russia, with 36,000 employees and 107 stores in 62 cities, is the second market behind France and represents more than 18% of its activity.
Employees of the Ukrainian branch of Leroy Merlin called on the brand on Monday to cease its activities in Russia after the bomb attack on a group store in kyiv.
As for Auchan, it has 30,000 employees and 231 stores in the country, where the brand generated a turnover of €3.2 billion in 2021, or around 10% of its revenue. The sports brand Decathlon operates no fewer than 60 stores there.
At the moment, the Mulliez group like Renault are trying to keep a low profile on the issue and are not speaking officially. Internally, the distributor would have explained to the French employees “having made the decision not to leave Russia to continue paying wages and providing food” to the population, informed the CFDT union representative, Gilles Martin, on Monday, March 14.
Total promises to distance
However, since the start of the war on February 24, not all French groups have been left 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” that explains having assumed responsibility and not under “pressure”, especially political. “You cannot make hasty decisions without knowing what the consequences are. For us, the question was whether we could replace this Russian oil”, explained the leader.
Luxury groups such as Hermès, Chanel, LVMH and Kering have announced “temporary” closures of their stores. If Russia can seem like a land of choice for luxury, it would actually represent only a small part of its 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 would suspend all investment in the country.
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