Financial Times: Western Business in Russia Decides to Stay

Western companies abandon plans to leave Russia

In Russia i megamoll commerciali crescono come funghi

More and more foreign companies, including such well-known ones as Avon Products, Air Liquide, Reckitt, Unilever, Philip Morris, and Auchan, which previously announced their intention to sell their assets in Russia after the outbreak of the armed conflict in Ukraine, have changed their minds and decided to continue operating in the country. The British newspaper Financial Times wrote about it on May 28 in an article headlined “Western businesses backtrack on their Russia exit plans.”

An unnamed “representative of a financial agency” working with foreign companies in Russia told the publication, “Compared to 2022, the attitude of Western business to the idea of leaving Russia has changed significantly. Two years ago, the move was a ‘moral imperative,’ but now they are increasingly asking themselves, do they really need to take such a radical step?”

In total, the British newspaper writes, after February 2022 (the beginning of the conflict in Ukraine), more than 2100 transnational corporations remained in Russia. At the same time, approximately 1600 international companies have reduced their operations in Russia or partially left the Russian market. Many Western companies, noted the Financial Times, “no longer feel compelled to leave the country.” For example, Avon started the process of selling its activities in Russia and received offers, but decided not to accept them. “For more than 135 years, Avon has supported women everywhere, regardless of ethnicity, nationality, age, or religion,” Avon said in a press release.

According to Alexandra Prokopenko of Carnegie Russia-Eurasia, “Rising wages plus stronger-than-expected economic growth in Russia have contributed to the spending boom. This has made Russia much more attractive to multinationals, especially in the consumer goods sector.”

In March 2022, PepsiCo announced that it had suspended sales and production of its flagship beverage in Russia, but continues to operate its dairy business in the country, which directly employs 20,000 people and indirectly 40,000 agricultural workers. “As a food and beverage company, now more than ever we should stay true to the humanitarian aspect of our business. This means we have an obligation to continue to offer our products in Russia,” said PepsiCo CEO Ramon Laguarta, quoted by the Financial Times.

Drinks such as Coca-Cola and Pepsi imported from Kazakhstan can be found in Russian stores with no problems. The re-export of Western products and consumer goods to Russia has been a “gold mine” for Central Asian countries for the past two years.