Going or staying in Russia? As the days go by and the Russian offensive in Ukraine, the question becomes more and more acute for many leaders of French companies who have invested in Russia. “With 1,200 companies, France is the leading foreign investor in Russia”, recalls Emmanuel Quidet, president of the France-Russia Chamber of Commerce and Industry (CCI-FR). It is estimated that these companies, 35 of which belong to the CAC 40, employ some 160,000 people locally.
“Most of the employees work for large groups, says Julien Vercueil, economist at the National Institute of Oriental Languages and Civilizations. But an ecosystem of VSE services has also been created, with people who have built their lives in Russia, sometimes by starting a family. For the latter, leaving would not have the same consequences as for international groups. »
Very virulent messages
Among these groups, there are giants in the food industry (Danone or Lactalis), distribution (Auchan, Leroy Merlin or Decathlon), automotive (Stellantis or Renault), luxury (LVMH or Hermès), and many heard energy, with Total…
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A few days ago, elected officials from Europe Écologie-Les Verts went to the headquarters of Auchan near Lille to call on the brands belonging to the Mulliez family (Auchan, Decathlon and Leroy Merlin) to cease their activities in Russia. A few demonstrators from associations of Ukrainians in France, for their part, posted themselves in front of the headquarters of Danone, in Paris, to protest against the continuation of the activities of the dairy group.
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“I see very virulent things happening on social networks, confides a source in one of the French companies present in Russia. Like bloodstained company logos or calls for boycotts. »
The case of South Africa
At the American University of Yale, in Connecticut (USA), the team of Professor Jeffrey Sonnenfeld, a specialist in corporate governance, maintains an updated list of the decisions of foreign companies established in Russia. On March 18, some 400 companies had already decided to suspend their activity there temporarily or permanently.
“Those who had the courage to leave first dragged down the others who feared for their international image”, explains Jeffrey Sonnenfeld, according to which companies have a moral duty to leave Russia. He draws a parallel with South Africa in the 1980s: “The departure of many companies was a very important factor in the destabilization of the government and the end of apartheid. »
Among the best-known brands around the world, McDonald’s, Starbucks, Ikea, BP, Shell, Apple, Uniqlo and H&M have already announced the suspension of their activities. “In 2014-2015, after the invasion of Crimea by Russia, Anglo-Saxon groups were the first to take such a decision, notes the economist Julien Vercueil. Most French companies, even if they asked themselves the question, did not move. »
This time, French groups are not absent from this withdrawal movement, in particular Hermès, Kering, Chanel or even LVMH. The latter has thus temporarily closed the 124 stores that the group owns in the country, but will continue to pay the salaries of its employees.
A risk of seizure
Others have chosen to continue for the time being. This is the case for the brands in the Mulliez galaxy. Auchan, which has 30,000 employees in Russia and 231 stores, derives around 10% of its revenue from this market. Leroy Merlin, with its 36,000 employees and over 100 stores, conducts 18% of its business in Russia. This is also the case for Renault, which makes 18% of its sales in Russia and employs 40,000 people there.
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“It should also be remembered that Russia is threatening to seize the assets of companies that leave the country permanently, notes Sébastien Jean, professor of economics at the National Conservatory of Arts and Crafts. This means the risk of losing billions of euros invested in assets, whether tangible or intangible (organization, training or in some cases, technological).»
In addition, a Russian law prevents foreign companies from selling their assets. “Faced with the tragedy in Ukraine, however, it is inaudible to justifythe continuation of business for economic reasons”, says a source close to a French company that has not left.
Solidarity with employees
The groups that stay put actually raise ethical arguments. Auchan has indicated internally “having made the choice not to leave Russia in order to continue to pay salaries and provide food” to the population, explains CFDT group union representative Gilles Martin.
This is also the case for Bonduelle, owner of three canning and frozen food factories which “produce essential foodstuffs” for Russian consumers. The company considers it its responsibility not to “not contribute to food shortages”. Its leaders announced that all profits made in Russia during the conflict would be used “to the future reconstruction of infrastructure and agricultural and food ecosystems in Ukraine”.
→ DEBATE. War in Ukraine: how much would Moscow cost a withdrawal of foreign energy companies?
“Danone’s management explained internally that it was suspending its investments but maintaining its production activity in order to meet the food needs of Russians, particularly in terms of infant nutrition”, explains, for his part, a trade union official of the French group, according to which it is necessary to be in solidarity with the Russian employees.
No government orders
The economist and research director at the CNRS, Élie Cohen, points to ambiguous messages from Europe. “We cannot blame Total for its presence in Russia, which offers it vital access to the gas and oil resources for which it has invested billions of euros, and, at the same time, recognize that, for the moment, we cannot can’t live without it”, he said. Companies also point out that the French government has not issued any injunctions to leave Russia.
Is the situation tenable? “Even carried by a minority shareholder, the pressure can be felt, reports Élodie Valette, partner at BCLP, as companies increasingly take reputational risk into account. » In a world where tensions are increasing, their area of international activity risks being reduced accordingly.
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A business partner with relative weight
France’s trade deficit with Russia fell from 3.1 billion euros in 2019 to 566 million in 2020. That same year, Russia was the 17e supplier of France and France was the 18e customer of Russia, absorbing 1.5% of its exports, according to figures from the General Directorate of the Treasury. French direct investments in Russia have long come from the TotalEnergies group (Yamal LNG, Arctic LNG 2).
The main products exported from France to Russia are transport equipment, then chemicals, perfumes and cosmetics.