While others close their Russian doors, French tills in Russia keep ringing.
French companies find reasons to do business in Russia while British companies pull out
Economic sanctions from Western nations were meant to send a message to President Putin: Stop the war and withdraw from Ukraine. The French are ignoring world opinion.
Many businesses from the West – including those from the UK – signed up to the sanctions but it turns out yet again many French businesses are continuing to trade. Facts4EU's report shows how this trade emasculates the EU sanctions regime and gives comfort and income to Putin.
On Friday we reported on how France effectively broke an EU arms embargo with sales of military equipment worth €234m to Russia between 2014-2020. In this analysis Facts4EU looks at what French retailers are doing today in Russia to break the sanctions.
Russia's French Connection
- The Franco-Russia Chamber of commerce reported on 22 March that, "Not a single French enterprise left Russia" following the announcement of EU economic sanctions
- TotalEnergies SE continues to trade in the oil and gas sector in Russia
- In comparison, BP PLC, Shell PLC and Exxon Mobil Corp have all pulled out of Russia
- Car manufacturer Renault – 15% owned by the French Government – closed its Russian plant because of shortages of parts but then reopened it with production starting up again
- Renault owns Russian car maker AvtoVAZ which includes the Lada marque. One factory of 30,000 closed temporarily but is open again and the wider indirect workforce of Renault in Russia is put at 500,000
- Retailers Auchan, Leroy Merlin and Decathlon are all are all part of the Adeo Group, owned by the Mulliez family, worth an estimated $24 billion US. All are continuing to trade from their outlets
- The Wall Street Journal reported a spokesman for Auchan explaining that 95% of its products in Russia are produced domestically, "including wheels of Camembert cheese made from Normandy cows that one of its suppliers moved from France to Russia after the country's 2014 annexation of Crimea triggered an initial wave of sanctions" – justifying sanctions-busting because it had bust the sanctions previously
- Auchan has 311 retail outlets in Russia employing some 40,000 employees. Leroy Merlin has 112 stores and Decathlon has 60 outlets
- Home improvement retailer Leroy Merlin closed its six stores in Ukraine following Russia's invasion
- Meanwhile in Russia its 112 stores remained open and it refuses to comment on reports that it is looking to expand its inventory to take up the space left by vacating Western companies
- When the Russians bombed a Kyiv shopping mall last week the Leroy Merlin store was turned to rubble and its security guard killed, leaving a widow and child
- The world's largest yoghurt maker – Danone – continues to trade in Russia, saying, "We have a responsibility to the people we feed"
- According to a French media report 35 companies from France's blue-chip CAC 40 index continue to trade actively in Russia
- In comparison Marks & Spencer has stopped supplying all goods to the 42 Turkish-owned outlets in Russia that are part of a franchise license agreement. M&S states it is in negotiations with its Turkish partner currently
French companies choose Russian profits before Ukrainian lives
The power of the EU to hold any unified position and deliver a common plan has yet again been exposed as a false narrative. France – which has not been in the top five of the Global Soft Power rankings for the last three years – is yet again exposed as only paying lip service to economic sanctions.
Last Friday Facts4EU revealed how France had found means to defeat the EU arms embargo to Russia by selling €234m of military equipment. Now, following another Russian invasion of Ukraine territory the leading French companies that were trading with Russia are continuing to do so. Using the excuse that they are delivering essential supplies such as food, it has not occurred to them that part of the process of sanctions is to send a message to people that the Russian Government's behaviour is unacceptable.
It might also be asked how a door knob or a tin of emulsion paint from Leroy Merlin is an essential supply, or that a table tennis table from Decathlon is vital. The whole point of sanctions is to bring pressure on a government that is impervious to media pressure because it controls the media. The people of Russia do not have open communications and the internet is now heavily censored there. Only by disrupting everyday life – in a peaceful but direct manner - will they begin to be able to appreciate the folly of President Putin's war.
The people of Ukraine have no such choice. Be it DIY tools, a new Lada car, or groceries from Auchan, all of these things have been taken away from them by Putin. The EU said it would introduce sanctions through its member states, therefore Ukraine's President Zelenskyy is quite entitled to ask why French companies are not following them.
This article first appeared on Facts4EU.org