Large car manufacturers such as Mercedes, Renault, Volkswagen and Nissan have left Russia, but Western food companies such as Nestle and Danone continue to operate in the country.
It will work out From Forbes’ recent listfor which the 50 largest foreign companies operating in Russia have been gathered.
Since the start of the war of aggression, more than 20 Western companies have disappeared from the list, and Chinese and Turkish companies have taken their place. Still, the nine largest companies on the list are Western.
See in the graphic below what kind of international companies still operate in Russia.
Russian economy expert, professor at the University of Turku Kari Liuhto considers the situation problematic. He believes that now is the time for consumers to start a boycott.
– I personally try to avoid all products and companies that continue to operate in Russia. It’s a paradox, of course, that by acting like this, the war also affects my own consumption habits. However, we should not forget that every day hundreds of people die on both sides of the front in this senseless war, Liuhto reflects.
Brand researcher at the University of Gothenburg Eva Ossiansson believes that by boycotting the products of companies operating in Russia, Finns and Swedes can to some extent pressure the companies to withdraw from Russia.
– It’s not easy, but companies think first of all about their image and market. A consumer boycott can affect a company’s operations if it spreads among the masses. For large companies, a boycott would have to be global to be effective.
In the summer, Sweden saw the so-called Marabou boycott. Swedish merchants put warning signs on their shelves for Marabou chocolates made by Mondelez, so that consumers would know that they were supporting the Russian war by buying chocolate.
According to Ossiansson, there have been no food boycotts in Sweden since the Marabou boycott.
According to Professor Liuhto, the withdrawal of Western companies will inevitably affect the well-being of Russian consumers and may cause them to change their attitude.
– The withdrawal of Western companies can also affect the employment situation, and the weakening of employment can, in an ideal situation, affect the support for the war among Russians, Liuhto reflects.
Pharmaceutical companies in a special position
In the spring of 2022, Russia saw an unprecedented wave of withdrawals, when many companies announced that they would suspend their operations in Russia due to the war.
According to Liuhto, the withdrawal of companies does not necessarily affect the financing of the war, but is a necessary moral statement.
Of the companies from EU and G7 countries that have subsidiaries in Russia, only less than nine percent left the Russian market last year.
The matter is clarified by a professor of economics at the University of St. Gallen in Switzerland by Simon Evenett and professor of international business at the Swiss School of Economics Niccolò Pisani from publishing at the beginning of the year from the research.
In 2022, the largest number of Finnish and American companies left Russia.
According to Liuhto, for example, Finnish food companies have withdrawn from Russia quite conscientiously, even if there is still room for improvement.
– In my opinion, Western and Finnish companies could consider stopping the export of pleasure products, such as coffee, to Russia.
According to customs data, Finnish exports to Russia fell to 20 million in July. Ten years ago, Finland exported products worth 477 million euros to Russia.
Liuhto would not limit the export of medicines to Russia even in a war situation.
– When it comes to medicines, it’s no longer about well-being, but about the lives of sick people. However, not all medicines are vital. Cosmetics are not important at all, Liuhto states.
According to statistics, there are still large pharmaceutical companies operating in Russia, such as the British Astra Zeneca, the Swiss Novartis and the German Bayer. Among the cosmetics companies, the French L’oreal continues in Russia.
Western products can lose their luster
Last year, large car manufacturers, clothing companies and electronics companies left Russia.
The Forbes list reveals that in 2023, the French household goods chain Leroy Merlin was the largest foreign company operating in Russia.
Leroy Merlin announced this year that it would sell its Russian operations and withdraw from the country by next year.
The equivalent notification made by beverage manufacturer Carlsberg.
In addition to the withdrawal of companies, the depreciation of the ruble has deprived many ordinary Russians of the opportunity for Western products.
Even if the Russian consumer still gets the original Coca-Cola, its price is many times higher than the Russian parallel products.
The Chinese and Belarusians are taking over the industry
Liuhto believes that the image of Western products in Russia will probably deteriorate in the future.
Opposition to Western products may also become more common as Chinese and Turkish companies fill the vacuum left by Western companies.
– Russia is moving from western products to eastern products. Next year, the change will be more visible, comments Liuhto.
In the Forbes list, the Chinese company, the car manufacturer Chery, is only the tenth largest company in terms of revenue.
There are also Turkish and Belarusian companies on the list.
Before the war, no Belarusian company reached the list of the 50 largest international companies operating in Russia. Now one company from the automotive industry and one from the food industry have entered the list.
Belarus’ exports to Russia increased by about 20 percent in 2022. The growth has continued this year. At the same time, Belarus’ dependence on the Russian consumer market has grown.
Russia’s share of Belarus’ exports was different sources up to 60–90 percent.
Liuhto believes that the background is a war started by Russia.
The withdrawal of companies is not clear-cut
Eventt and Pisasi, who studied the withdrawal of companies, estimate that breaking commercial ties is a complex process.
According to Liuhto, a full withdrawal would mean that the company has no ownership or cash flows in Russia. The company should also not give permission for the use of the western brand. If its brand is used without permission in Russia, the company should initiate a legal process.
In addition, in some situations the Kremlin does not allow companies to withdraw from the country.
The Finnish company Fortum, for example, announced that it had decided to leave Russia in the spring of 2022. However, the Russian authorities took over Fortum’s holdings in Russia in April of this year.
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