War in Ukraine-“Value is more valuable than profit”. Volodomyr Zelensky spoke to French lawmakers and senators at a video conference on Wednesday, March 23. And he remembered to point his finger at the big French companies that have an economic presence in Russia.
Not all of them were mentioned, but the President of Ukraine listed three. Renault, Auchan (Murries Group), Leroy Merlin, etc. must stop sponsoring Russian war machines, “he repeated before the national representative. “They have to stop funding children and women, rape,” he said.
Strong presence in Russia for these groups
Since 2012, Renault has made a strong presence in the Russian market by acquiring the AvtoVAZ Group, which manufactures Lada vehicles, the country’s largest automobile market, which accounts for nearly one-third of sales. Russia is also the second international market for French manufacturers. Renault is even more exposed because it is associated in Russia with Russia’s public conglomerate Rostec, directed by Vladimir Putin’s ally Sergey Chemezov.
In this case, it’s not just the diamond brand. Distributors of the Mulliez Group (Auchan, Decathlon) or Leroy-Merlin have also been established in countries led by Vladimir Putin since 2000. DIY specialist Leroy Merlin, Russia, with 36,000 employees and 107 stores in 62 cities, is the second largest market after France, accounting for more than 18% of its activities.
Employees of the Ukrainian branch of Leroy Merlin asked the brand to stop working in Russia on Monday after the bombing of the group’s store in Kyiv.
With Auchan, it has 30,000 employees and 231 stores in the country, with 2021 sales of € 3.2 billion, or about 10% of its revenue. The sports brand Decathlon operates more than 60 stores.
For now, Murries groups like Renault are trying to keep the issue unobtrusive and don’t speak officially. Internally, the distributor would have explained to French employees that they had “chosen to stay in Russia to keep paying and providing food,” CFDT union representative Gilles Martin said in March. Reported on Monday, 14th.
I promise to keep a distance
However, not all French groups have remained inactive since the start of the war on February 24, but the most frequently taken position depends on the size of the investment and the local market.
Hydrocarbon giant Total announced on Tuesday, March 22, that it would stop buying Russian oil by the end of 2022. “You can’t make a quick decision without knowing what the consequences will be. For us, the question was whether we could replace this Russian oil,” the leader elaborated.
Luxury groups such as Hermes, Chanel, LVMH and Kering have announced “temporary” closures of their stores. If Russia looks like a country of choice for luxury goods, it’s actually only a small part of sales. Only 1% according to Kering or Burberry and 2% according to LVMH.
On March 6, the French agricultural food group Danon announced that it would continue its activities in Russia. In Russia, it generates 5% of its income and employs 8,000 people, but all investment in Russia has stopped.
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