by Mish Shedlock, Mish Talk:
US and UK firms largely abandon Russia. Fearing confiscation, it’s business as usual for France.
Business As Usual
French president Emanuel Macron announced “We are not at war with Russia” making it Business as Usual for French countries as noted by Eurointelligence.
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We are not at war with Russia. Emmanuel Macron’s statement has a certain authority. Given that he has had at least 19 telephone conversations with Vladimir Putin since the invasion, it also has some credibility. This is at least how the French companies invested in Russia read it. They continue to stay there despite the war in Ukraine, the sanctions, and the real possibility that things could get a lot worse. Macron, the guarantor and mediator of peace, and French companies as a manifestation of this trust.
Insolvency in Russia can be invoked if the management stops leading the company, for example because the management left Russia. McDonald’s, for example, closed 847 restaurants in Russia, totally leaving the country from a business perspective. The Russian government has renamed all the previously McDonald’s branded restaurants as Uncle Vanya. They are still delivering burgers, but under a Russian name and leadership.
French Companies Still Doing Business
- Auchan, the French supermarket chain has 300 stores in Russia.
- Leroy Merlin stayed with its 112 stores selling homeware and gardening goods.
- In a letter to suppliers, the head of the Russian unit of Merlin said that their sales have even significantly increased since Russia invaded Ukraine.
- Decathlon has stayed open with its 80 stores throughout Russia.
- Business as usual is a sign of French confidence, not turning Russia into a pariah state because of its president’s decisions to invade Ukraine.
There are sanctions and there are sanctions.
President Biden can and has enforced them. But there are allowances for medical supplies. And there is no way to force locally owned franchises to close.
CBS News has a List of Companies Still Doing Business in Russia.
Still Doing Some Business
- Hyatt suspends development but not business
- Duncan Donuts
- Cargill continuing to offer what it called “essential food and feed facilities”
- Nestle on March 9 said it had suspended capital investment and advertising in Russia, but would continue to sell “essential” food products in that country.
- General Mills — the Minneapolis-based maker of Cheerios and other packaged food— has a joint venture with Nestle
- Herbalife Nutrition
- Koch Industries’ wholly-owned subsidiary, Guardian Industries, operates two glass production plants in Russia that employ about 600.
- Chicago-based global advertising agency Leo Burnett has an office in Moscow, and its Russian clients include Russian digital-services provider Rostelcom
- Patreon, an online service that lets internet content creators earn money, continues to operate in Russia. “I don’t think individual creators should have to pay for the misdeeds of their authoritarian leader,”
- Fast-food giant Subway said it would redirect any profits from its Russian operations to humanitarian efforts, noting that roughly 450 outlets in Russia are independently owned and controlled by local franchisees.
- Oilfield services firm Halliburton gets as much as 2% of its revenue from Russia, according to a J.P. Morgan estimate cited by Bloomberg News.