Heineken said Monday it will completely exit Russia, thinning out a small but powerful list of multinational firms maintaining Russian business operations.
Bottles of beer are seen at the production line of a French Heineken factory.
AFP via Getty Images
Dutch brewing company Heineken announced Monday it will completely offload its Russian business at an estimated cost of 400 million euros ($439 million) on Monday, fully exiting the Russian market after suspending its operations in the country earlier this month.
Other European firms continue to dig into their Russian ties, and Ukrainian President Volodymr Zelensky accused French companies Renault, Leroy Merlin and Auchan of being “sponsors of the Russian war machine” in a speech to French Parliament last Wednesday.
Home improvement retailer Leroy Merlin, which said earlier this month its 112 Russian stores will continue normal operations, came under fire Monday after Ukraine’s Ministry of Defense tweeted an image of what appears to be a Leroy Merlin store destroyed by Russian bombing in Ukraine, writing Leroy Merlin “became the first company in the world to finance the bombing of its own stores,” following a Saturday report in the Telegraph that the company largely owned by French billionaire Michel Leclercq and the Mulliez family was ramping up its Russian business following competitors’ exits.
Auchan, a supermarket chain held by the same parent company as Leroy Merlin, has similarly maintained its Russian operations and Russia accounts for 10% of Auchan’s total revenue, according to Reuters.
Hours after Zelensky’s speech, Renault said it will suspend production at its Moscow plant and is “assessing”though it retains its majority stake in Russia’s largest carmaker AvtoVaz.
Nestle announced Wednesday it will continue to sell essential products such as infant food in Russia but suspend all other products, including its KitKat and Nesquik brands, a significant rollback that comes short of a full withdrawal from the country after Ukrainian President Volodymyr Zelensky criticized Nestle Saturday during a video address to a rally in Switzerland, saying, “Business works in Russia even though our children are dying and our cities are being destroyed.”
Nokian Tyres said Tuesday it would continue production for its passenger car tires in Russia, and its chief executive Jukka Moisio defended the move to Finnish newspaper Helsingin Sanomat as a way to prevent Russia from overtaking the factory to make tires for its military — though Reuters noted Nokian produced 80% of its tires in Russia before the war began.
Koch Industries, the American conglomerate that ranks as the second-largest private company in the U.S. according to Forbes’ estimates thanks to $115 billion in annual revenue, stuck by its Guardian Industries subsidiary continuing to operate its two glass manufacturing facilities business in Russia Wednesday, and Koch COO Dave Robertson explained in a statement the company doesn’t want to abandon its employees in the country “or hand over these manufacturing facilities to the Russian government so it can operate and benefit from them.”
In addition to Auchan, Koch Industries and Leroy Merlin, at least 40 other companies have refused to scale back their Russian business operations, according to a widely cited list compiled by Yale University professor Jeffrey Sonnenfeld, who identifies 350 companies as withdrawing from Russia or suspending operations there.
Credit Suisse, Switzerland’s second-largest bank, is among the large firms that hasn’t pulled out from Russia: Its chief executive Thomas Gottstein said Tuesday the company is “reviewing” its Russian business ties, but the company’s $1.1 billion in exposure to Russia through loans and subsidiaries makes a withdrawal from the bank very unlikely.
Several notable companies announced changes to their Russian business dealings after garnering attention earlier this month for not doing so as hundreds of other companies announced changes to their business in the country. Citigroup announced it will “expand the scope” of its exit from Russia beyond its previously announced exit from consumer banking in the country. Tire makers Bridgestone and Pirelli were slow to announce any modification to their Russian operations, but both announced the suspension of manufacturing in the country earlier this month.
Zelensky had avoided singling out individual companies for their Russian business dealings until March 13, when he called on technology giants Microsoft, Oracle and SAP to further roll back their operations in Russia. In his Saturday speech, Zelensky called on Swiss banks to step up their actions against Russia, saying, “The money of the people who unleashed this war is in your banks. Help fight this,” though Zelensky didn’t specifically name Credit Suisse or other banks. Switzerland announced last month it will freeze the assets of individuals sanctioned by the European Union, but the Swiss Bankers Association estimates Swiss banks hold up to $215 billion of Russian money in offshore accounts.
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