French firms TotalEnergies and Renault announced they were, over time, suspending their activities and halting production in Russia after being widely criticized for their inaction since the invasion of Ukraine. But leaving Russia doesn’t have the same cost or the same consequences for all companies. And we should calculate in who will profit later.
PARIS — Companies that decide to cut ties with Russia are not all in the same boat. Some like Apple — which can no longer deliver iPhones to the country isolated from the rest of the planet — only take minimal risks. They forego limited and temporary revenues, hoping that the day will come when the war stops and Russia finds some semblance of normalcy, and their business can resume.
It is not so simple for several of the largest French companies, which were among the very first foreign investors in post-Soviet Russia and control numerous assets in the country. These multinationals that have invested billions (from retail group Auchan to energy giant TotalEnergies, automaker Renault and Société Générale bank) have much more to lose by breaking with Vladimir Putin.
In the short term, they deprive themselves of a profitable market, and of growth potential in the medium term. If Russia ends up regaining a positive reputation, those who have made the decision to leave will never be able to completely come back. Sanctions are not permanent. Departures are.
An Auchan supermarket in Moscow
Short-term actions, long-term uncertainty
In the current context, these decisions, even if they may seem hasty to some, are understandable. Public opinion can be a bit too ready to call any company still active in Russia an immoral “war profiteer” when these companies sometimes play a crucial role for us (like TotalEnergies), for millions of Russian citizens (like Auchan or Danone) or for thousands of employees (like Renault). But beyond this backlash, staying active in a country that will be completely isolated is not easy.
Who will the benefits go to then?
Supply chains have been disrupted, local revenues are threatened and the Russian adventure could cause cash losses likely to weaken groups globally. When facing uncertainty, it may be appropriate to take drastic actions on the spot, especially since even in the event of peace, Russia has become such an unpredictable partner that it will be difficult to continue to invest there.
Still, let's not be naive. There’s no doubt that the assets that our companies are forced to give up or sell will be seized by the Russian state — or sold off to the oligarchs! And tomorrow, when time has allowed wounds to heal, will Europe continue to impose sanctions on Moscow or will it open its doors wide again to Russian products? If that happens, will the benefits go to those who developed them, or someone else? The real war profiteers may not be who we think they are.
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