Justifying their stay in Russia by “provision of essential goods” is a poor excuse. In reality, companies that claim this are protecting their market share. Those who stay (including those who keep silent about this) should exit immediately rather than continue to whitewash Russian war crimes with their presence and finance Russia’s war on Ukraine with their taxes.
After the start of the full-scale attack of Russia on Ukraine, with tens of thousands killed and multiple war crimes documented, many companies (often under the pressure of their customers and shareholders) have left Russia. Others stayed, continuing to provide goods and services — to Russians and taxes – to the Russian government.
Figure 1 shows that the healthcare industry has the highest share of companies that continue business as usual or have slightly modified it (usually this implies halting advertising, new investment and new clinical trials), followed by energy, consumer staples and utilities. While the EU has introduced a partial energy embargo (which will probably force some energy companies to leave), the situation with healthcare companies and those producing consumer staples is more complicated. Theoretically these companies can justify their stay in russia by humanism, i.e. providing necessary food or medicine to russian consumers. But how many of them actually do this and are their arguments valid?
Figure 1. Companies that did not exit russia
Data: Yale list of companies (A - companies that completely exited russia, F - those that continue business as usual)
Note: total number of companies in a certain industry in parentheses
To answer this question, we looked at companies operating in healthcare and consumer staples that belong to groups D and F (i.e. the companies that remain in russia) by Yale classification (figure 1) and added to them companies identified by Balyuk and Fedyk (2022) that belong to the same industries and decided to stay in Russia. In total, 111 companies were identified (this list is probably not exhaustive but we believe it contains the majority of companies).
The distribution of these companies by industry and country is presented in the following table.
Table 1. Country distribution of companies from consumer staples and healthcare industries that stay in Russia
|country||Consumer Staples||Health Care|
Of these companies, 43 did not make any statement on the Russia-Ukraine war. 22 wrote only about their actions (most often complying with sanctions, stopping advertising and making new investment in Russia, and providing humanitarian support for Ukraine). 42 companies (35%) provided a justification for their stay in Russia based on humanitarian reasons.
Their excuses were:
- providing basic food or hygiene products to Russian consumers
- providing essential medicine and/or conducting clinical trials that are important for the humanity
- providing jobs (arguing that Russian people are not responsible for actions of their government)
Some companies provided a combination of these explanations, e.g. Auchan:
Our job is to do everything we can to ensure that the inhabitants of our countries of operation have access to good quality food at an affordable price and thus meet the essential food needs of the civilian population. Our 30,000 Russian employees are doing the same job to be as close as possible to a population that has no personal responsibility in the outbreak of this war. Abandoning our employees, their families and our customers is not the choice we have made. As French President Emmanuel Macron has said, "we are not at war with the Russian people". Closing our activities in Russia would be considered as a premeditated bankruptcy leading to an expropriation that would strengthen the Russian economic and financial ecosystem, would put our employees and their families in great precarity and would deprive, in a period of high inflation, the population of the services of a discounter distributor, which has been operating in the country for 20 years. Source: Auchan statement
In this statement we see one additional explanation - that “closing our activities in Russia would be considered as a premeditated bankruptcy leading to an expropriation that would strengthen the Russian economic and financial ecosystem”.
Let’s consider these explanations in more detail. Specifically, I will argue that none of them is substantiated by data or logic. This suggests that the decision for the majority of companies to continue operating in russia must be driven by their own financial considerations, rather than anything else.
First, 70-80% of Russians support Putin and believe that Russia is going in the right direction. Thus, most Russians are not suffering under Putin’s regime, they are highly supportive of it. Moreover, they are supporting the war. They are supporting killing of Ukrainians and raping of Ukrainian women and children (the Security Service of Ukraine published a large collection of recordings of Russian occupants talking between themselves or with their relatives. These recordings very well illustrate that they don’t consider Ukrainians as humans). Thus, no targeted sanctions against Putin himself or his minions will change the course of war. Heavy sectoral sanctions affecting all the Russian citizens should be applied. Ukraine is bearing an enormous cost of the war - tens of thousands of lives, between a third and a half of its economy, thousands of houses, roads and other infrastructural objects have been and are being destroyed. Moreover, at least 3000 Ukrainians died (according to WHO) because they were unable to receive medicines for their chronic diseases or immune diseases such as cancer because the supply chains are broken. On top of that, Russia constantly bombs hospitals and maternity homes.
Other countries are bearing a huge cost as well - supporting Ukrainian refugees, providing weapons, humanitarian and financial aid. David Nabarro from WHO said at the Davos forum that 94 countries are at risk of severe hunger or famine because of the Russian attack on Ukraine. Thus, it is unfair not only to Ukrainians but to millions of people in the world to try to shield Russian citizens from the consequences of war which they support.
As another example, Cargill justifies their continued operations in Russia by stating that “Food is a basic human right and should never be used as a weapon”. But this is exactly what Russia does - it destroys Ukrainian grain storages and agricultural machines, it steals Ukrainian grain and blocks Ukrainian ports depriving not only Ukrainian farmers of their revenues but also many people in African and Asian countries of food. If Cargill believes that food should not be used as a weapon then why is it supporting Russia?
Second, Russia is a large producer and exporter of food. It also has a large domestic retail sector (e.g. Magnit, Lenta, Perekrestok etc). So it is doubtful that without those companies or without foreign supermarkets the Russian population would be deprived of the basic food. Likewise, Russia has several dozens of producers of hygiene products which can substitute for foreign producers who leave. In fact, Russians themselves do not want to see foreign companies in their country - they started the campaign “Zamestim” (meaning "we will replace", where the first cyrylic letter was deliberately replaced with a half-swastika russia uses as their war symbol). This campaign implies that they plan to replace imported goods with locally produced ones. If foreign companies are so willing to support Russian people, why don’t they support this campaign?
Third, “premediated bankruptcies” of foreign producers or retailers will not strengthen Russian economy because an enterprise is not only premises and goods. An enterprise is primarily technology, management and expertise. Without foreign managers and engineers those plants and supermarkets will not be worth anything. This is acknowledged even by the strongest supporters of Putin's regime.
Fourth, very often those companies that cite “caring for their Russian employees” as the reason to remain in Russia have at the same time closed their Ukrainian production sites because of the war. E.g. Mondelez states that “We continue to prioritize the safety of our people and our operations remain closed in Ukraine…As a food company, we are scaling back all non-essential activities in Russia while helping maintain continuity of the food supply during the challenging times ahead. We will also continue to support our colleagues in the market who are facing great uncertainty.” Is it fair to deprive Ukrainians of their jobs (and Ukraine of its taxes) while at the same time supporting the jobs and paying taxes in the aggressor state? The same taxes that are then used to purchase weapons to bomb their Ukrainian employees?
Fifth, companies providing pharmaceuticals or medical goods refer to ethics stating that they would continue supplying patients in Russia with essential drugs. However, as explained above, thousands of people in Ukraine are left without medical help. Russian occupants deliberately block humanitarian convoys, destroy medical facilities; in some cases they did not allow pregnant women to go to maternity hospitals. Is this an ethical behaviour? We believe that it is not. We believe that all the pharmaceutical and healthcare companies that consider themselves “ethical” or “socially responsible” should immediately withdraw from Russia. If Russian patients need some medicines, they should ask their government to provide them with those medicines. Or they should turn to the Red Cross to which multinational companies donated huge amounts of money and which tried to help Russia to deport Ukrainians.
Sixth, some companies stated that they would donate their profits from Russian operations to Ukraine, and some already reported donations either to Ukraine or to international charities such as Red Cross, UNICEF, or Save the Children. While this charitable activity can be welcomed, a much more efficient way to help Ukraine would be to donate to local organizations that have much leaner bureaucracy and better understand the needs on the ground. Moreover, while making these donations they are also paying wages to the Russian employees and taxes to the Russian government which are then--directly or indirectly--used to buy weapons and kill more Ukrainians.
Thus any excuses that one may find for remaining in Russia can be easily dismissed. What these companies (and the others, which remain silent) are really doing is protecting their market shares and their profits. Protecting a few thousand lives and jobs in a country that killed tens of thousands since February 24th (and killed hundreds of thousands before that - in Ukraine, Syria, Chechnya, Georgia and other states) and caused millions to lose their jobs, houses, their entire lives is a hypocrisy and an extreme degree of cynicism.
Annex. Analysis of statements of companies that stayed in Russia
We analyzed 60 statements of companies who stay in Russia to see what companies put into them. Figure A1 shows what was mentioned in these statements. It shows that in more than a half of analyzed statements companies mentioned caring for Russian consumers in different forms (e.g. provision of essential goods, ethical issues, “putting patients first” etc). Some companies mentioned their consumers in general, without dividing them into Russian and Ukrainian. One company talked about consumers in CIS countries to whom products of plants based in Russia are delivered.
More than a half of the companies described helping their Ukrainian employees - providing financial support, helping to relocate etc. Almost two times less companies justified their stay in Russia by their responsibility to support Russian employees; some companies specified that these employees “face challenges”, “have no impact on the situation” and even “face threats of imprisonment, unsafe conditions, and countersanctions.” There were a few “exotic” statements, such as “donating seeds to Russian farmers to avoid global food crisis” or “caring for cocoa producing families”.
A lot of companies reported donations - to Ukraine, Ukrainian refugees and/or large international charities or humanitarian organizations.
Figure A1. Number of mentions of certain topics in the statements of companies on Russian-Ukrainian war
Source: own calculations
Figure A2 shows that companies mostly call the war the war. Some of them went even further and used such words as ‘invasion’ or ‘brutal aggression’. 14 statements directly or indirectly called Russia an aggressor, although in direct statements the formulation was “Russian army” or “Russian government” rather than Russia. To the contrast, 13 companies (almost a quarter) used some euphemisms to describe the war, such as “conflict”, “situation in Ukraine” or “events in Ukraine”.
Figure A2. How companies called the Russian-Ukrainian war in their statements
Nike has announced plans to leave Russia, becoming the latest Western brand to quit the country since the invasion of Ukraine in February. The US sportswear giant halted online orders and closed the stores it owned in the country in March.What are the biggest companies to leave Russia? ›
McKinsey & Company said it would not take on any new work in Russia, would stop work for state-owned entities and “will no longer serve any government entity in Russia.” The Big Four accounting firms — Deloitte, EY, KPMG and PwC — are pulling out of the country.What would happen if Russia and the US went to war? ›
It would exceed the largest anomaly ever recorded since the beginning of Food and Agricultural Organization observational records in 1961. And under the largest war scenario – a war between the U.S. and Russia – more than 75% of the planet would be starving within two years.What are the benefits of doing business with Russia? ›
Russia does a great job of providing incentives for foreigners to do business. As a member of BRIC countries, Russia has fair tax rules for its residents. The country has one of the lowest corporation tax rates on the European continent. That means it attracts other foreign investors that want to save money on taxes.Why is McDonald's not in Russia? ›
Due to the 2022 Russian invasion of Ukraine, McDonald's temporarily suspended all operations in the country on 8 March. In May, the company announced that it would sell all of its restaurants in Russia, which were rebranded as Vkusno i tochka.Is Nestle still operating in Russia? ›
Russian supermarkets continue to carry a large selection of Nescafé products – a picture from early February 2023. Anyone visiting supermarkets in Russia would find it hard to believe that foreign brands have left the country in large numbers, despite company proclamations. The shelves are full, the selection is large.Did Walmart pull out of Russia? ›
Wal-Mart has canceled its plans to expand into the Russian market. The giant U.S. retailer said Monday it had decided to close its office in Moscow, because of the lack of opportunity to acquire Russian retailers.Is Nike still open in Russia? ›
Nike is permanently exiting the Russian market, one of the first major US sportswear brands to pull out completely. “Nike, Inc. has made the decision to leave the Russian marketplace,” a Nike spokesperson said in an emailed statement yesterday.Did Starbucks leave Russia? ›
Sindika, a Russian hospitality holding company, is backing the new business. There were 130 Starbucks locations in Russia when the company pulled its brand from the country. The stores were owned by Kuwait-based Alshaya Group, a Starbucks's licensee.Who is more powerful Russia or USA? ›
In short, Russia is ranked 2nd out of 140 in military strength while the US is ranked 1st. As per the army population, Russia has 142,320,790 soldiers while The US has 334,998,398 soldiers. The available manpower is 69,737,187 with Russia and 147,399,295 with the United States.
A Russian nuclear attack would likely focus on high-value targets in North Dakota or Montana.What countries would survive a nuclear war? ›
The study published in the journal Risk Analysis describes Australia, New Zealand, Iceland, Solomon Islands and Vanuatu as the island countries most capable of producing enough food for their populations after an “abrupt sunlight‐reducing catastrophe” such as a nuclear war, super volcano or asteroid strike.What does Russia make the most money from? ›
It is the world's leading natural gas exporter, the second-largest natural gas producer, and the second-largest oil exporter, and producer. Russia's foreign exchange reserves are the world's fourth-largest. It has a labour force of roughly 70 million people, which is the world's seventh-largest.Who does the most business with Russia? ›
The value of total exports from Russia to its major trade partner — China — amounted to nearly 69 billion U.S. dollars in 2021.How much business does the US do with Russia? ›
U.S. goods and services trade with Russia totaled an estimated $34.9 billion in 2019. Exports were $10.9 billion; imports were $24.0 billion. The U.S. goods and services trade deficit with Russia was $13.1 billion in 2019.Why is Starbucks leaving Russia? ›
Partners, As I communicated Friday, we condemn the horrific attacks on Ukraine by Russia and our hearts go out to all those affected. We continue to watch the tragic events unfold and, today, we have decided to suspend all business activity in Russia, including shipment of all Starbucks products.Is Coca-Cola still in Russia? ›
Coca-Cola continues to remain top seller in Russia despite withdrawal: Report. The report further said that the top-selling Dobry Cola brand, which is produced in Russian factories, continued to be a top seller among cola drinks and belonged to Coca-Cola HBC Russia, accounting for just over one-third of the market.Is KFC still in Russia? ›
KFC's U.S. parent company Yum! Brands Inc (YUM. N) last week finalised its exit from Russia, transferring master franchise rights to Smart Service, a local franchisee led by Konstantin Kotov and Andrey Oskolkov.Does Coca-Cola have factories in Russia? ›
In close alignment with The Coca-Cola Company, we have stopped all production and sales of brands of The Coca-Cola Company in Russia.Is PepsiCo in Russia? ›
PepsiCo in March said it would continue to sell daily essentials, such as milk and other dairy offerings, baby formula and baby food, in Russia. The company has operated in Russia for more than 60 years and its colas were one of the few Western products allowed in the Soviet Union prior to its collapse.
In reality, Russia has never implemented a ban on peanut butter, but it was very difficult to find during the 1980s era of the Soviet Union. While the Cold War was still ongoing, between the US and Soviet Union, the former was thought to be the largest manufacturer of the spread anywhere in the world.Are Oreos still being sold in Russia? ›
Mondelez International is still doing business with Russia, despite growing pressure and calls for boycotts among its consumers. The food and beverage conglomerate owns a wide variety of popular brands including Oreo, Ritz, Cadbury, and Trident.
In Russia, we have implemented significant adjustments to our business. In addition to suspending all media, advertising and promotional activity, we have taken steps to suspend capital investments in our Stupino, Russia facility.Did China buy Walmart in the US? ›
No, Walmart is not owned by China, nor has it been sold to a Chinese investment group. According to USA TODAY fact check, a claim that Walmart had been sold to a Chinese firm was proven false. On Jan. 2 2021, a Facebook post claimed a Chinese business group bought out America's largest retailer.What clothing brands left Russia? ›
|Oysho (Inditex) HQ: Spain Clothing Retail||March 5: Closing shops and website Show your support! SOURCES|
|Prada HQ: Italy Clothing Retail Luxury||March 17: Suspended its retail operations in Russia Show your support! SOURCES|
|Pull & Bear (Inditex) HQ: Spain|
- McDonald's, Coca-Cola, Starbucks and Heineken are the latest companies to announce they are halting business in Russia after mounting pressure to act.
- The world's biggest cosmetics firm L'Oreal and rival Estee Lauder are both closing shops and ceasing online sales.
HERZOGENAURACH – Sportswear giant Adidas is winding down its business operations in Russia permanently because of the ongoing war in Ukraine. The company suspended its operations back in March in Russia where it had around 500 stores accounting for about two per cent of its global revenues.Why Starbucks closing in usa? ›
Starbucks is closing 16 stores around the country because of repeated safety issues, including drug use and other disruptive behaviors that threaten staff. The coffee giant is closing six stores in its hometown of Seattle, six in Los Angeles, two in Portland, Oregon and one each in Philadelphia and Washington.Why is Starbucks not in Italy? ›
The evolution of Starbucks certainly absorbed some of the Italian coffee tradition, but it was structured around the American society. Despite being inspired on the Italian culture, therefore, it is probable that the Starbucks model would not fly in Italy.What do they call Starbucks in Russia? ›
Owned by Russian oil magnate Alexander Govor, it is called Vkusno i Tochka, which translates as "Tasty and that's it".
Key Points. The United States has been ranked the most powerful country in Asia in a new Lowy Institute report.Who is more powerful NATO or USA? ›
NATO, which was formed in 1949, is the most powerful military alliance in the world.What is the strongest military in the world? ›
1. United States Of America. US Military has the biggest defence budget in the world. They are known for their most powerful Air Force on the planet, named as United States Air Force (USAF).What state would get nuked first? ›
The cities that would most likely be attacked are Washington, New York City and Los Angeles. Using a van or SUV, the device could easily be delivered to the heart of a city and detonated. The effects and response planning from a nuclear blast are determined using statics from Washington, the most likely target.Where in the US would survive a nuclear war? ›
Some estimates name Maine, Oregon, Northern California, and Western Texas as some of the safest locales in the case of nuclear war, due to their lack of large urban centers and nuclear power plants.How long would it take for a nuke from the US to hit Russia? ›
It would take a land- based missile about 30 minutes to fly between Russia and the United States; a submarine-based missile could strike in as little as 10 to 15 minutes after launch.Which country would be safest in a nuclear war? ›
The study involved looking at abrupt sunlight-reducing situations. Scientists have recently revealed that Australia and New Zealand are best placed to survive a nuclear apocalypse and help reboot collapsed human civilisation.Where is the safest place to be in a nuclear war? ›
The Smart Survivalist named the Nordic country as the safest place in the event of a nuclear war. “Because Iceland is isolated from the rest of the world by the North Atlantic Ocean, it would be very difficult for a nuclear missile to reach Iceland without being detected first,” it said.What states would be targeted in a nuclear war? ›
Areas of rural Idaho, Maine, Northern California, as well as Oregon may be more improbable targets. The US has placed its nuclear forces away from areas with high populations. Intercontinental ballistic missile silos (ICBMs), military bases, and nuclear storage are spread out across the US.Does Russia have good salary? ›
What is average wage in Russia? Average Wages in Russia increased to 65094 RUB/Month (835.026 USD/Month) in February 2023. The maximum rate of average wage for employees was 69278 RUB/Month and minimum was 0 RUB/Month. Data published Monthly by Ministry for Economic Development.
As one might expect, China has been the top buyer of Russian fossil fuels since the start of the invasion. Russia's neighbor and informal ally has primarily imported crude oil, which has made up more than 80% of its imports totaling more than $55 billion since the start of the invasion.What is the unemployment rate in Russia? ›
Russia Unemployment Rate is updated monthly, available from Jan 1994 to Jan 2023, with an average rate of 6.87%. The data reached an all-time high of 14.66% in Feb 1999 and a record low of 3.60% in Jan 2023. The data is reported by reported by Federal State Statistics Service.What is the #1 industry in Russia? ›
Machine building is the leading industry in Russia, which is concentrated mostly in Moscow, St. Petersburg, the Urals, Volga region, and Westerns Siberia. It provides all other industries with equipment and machinery.Which big company left Russia? ›
Exxon Mobil said it would end its involvement in a large oil and natural gas project. Shell planned to exit its joint ventures with Gazprom, the Russian natural gas giant. In an update to shareholders, the company said that its decision to leave Russia would cost $4 billion to $5 billion in the first quarter alone.Which industry is booming in Russia? ›
These industries include defense, automotive, electronics, finance, telecommunications and energy. With so many industries, Russia is clearly a powerful and modern country that can and will impact society and world economics.What does Russia rely on the US for? ›
Russia and the United States maintain one of the most important, critical and strategic foreign relations in the world. Both nations have shared interests in nuclear safety and security, nonproliferation, counterterrorism, and space exploration. Embassy of Russia, Washington, D.C.What is Russia's biggest export to the US? ›
Russia-United States In 2021, Russia exported $27.4B to United States. The main products that Russia exported to United States are Refined Petroleum ($13.2B), Crude Petroleum ($3.77B), and Platinum ($2.4B).Does Russia have more resources than USA? ›
Natural resources in the United States
With a total natural resource value of 45 trillion U.S. dollars, the U.S. is the second leading country worldwide based on natural resource value after Russia. Among the main contributors to the United States' natural resource value are coal, timber, natural gas, gold, and copper.
The Russian government maintains a restrictive and complicated visa regime for foreigners who visit, transit, or reside in the Russian Federation. A U.S. citizen who does not comply with Russian visa laws can be subject to arrest, fines, and/or deportation.Where is the best place to survive a nuclear war in the US? ›
Ragusa recommends rural parts of Texas, Florida and California (far from large population centres which might make attractive targets) as places to survive a nuclear exchange. He says: 'The reason why I picked these three states is because they are near water and have warm climates.
Is the U.S. able to stop a nuclear attack? David Barash, a professor of psychology at the University of Washington who has written about preventing nuclear war, told Newsweek the chance of the U.S. intercepting a nuclear-armed Inter Continental Ballistic Missile (ICBM) is "extremely low."What not to do in Russia as an American? ›
- Don't wear your shoes inside. ...
- Don't whistle indoors. ...
- Don't leave empty bottles on the table. ...
- Don't smile all the time. ...
- Don't sit by the corner of the table. ...
- Don't shake hands with gloves on. ...
- Don't shake hands over a threshold. ...
- Always take part in toasts.
Russian American population is estimated at approximately 2.9 million people. Second largest ethnic market representing 10.3% (2.9 Million people) of the total foreign-born population of 28.4 million. The leading ethnic group is Mexicans that represent 28% or 7.8 million of all US foreign-born population.Has Russia ever been friends with USA? ›
Russia officially recognized the United States in 1803, and the two countries established diplomatic relations in 1809. From 1776 to 1917 the US and Russia maintained cordial relations, with occasional cultural and commercial exchanges. Russia was neutral during the American Civil War, but tended to favor the North.What happens if China and US go to war? ›
A successful Chinese invasion of Taiwan would punch a hole in the U.S. and allied chain of defenses in the region, seriously undermining America's strategic position in the Western Pacific, and would probably cut off U.S. access to world-leading semiconductors and other critical components manufactured in Taiwan.Is Russia more powerful than NATO? ›
The combined total of Nato military personnel currently exceeds 5.4 million – around four times as many as Russia, according to Statista. It has about five times as many aircraft, four times as many armoured vehicles and three times as many military ships.What state is safest from nuclear war? ›
Some estimates name Maine, Oregon, Northern California, and Western Texas as some of the safest locales in the case of nuclear war, due to their lack of large urban centers and nuclear power plants.Can you survive a nuclear bomb in a house? ›
The walls of your home can block much of the harmful radiation. Because radioactive materials become weaker over time, staying inside for at least 24 hours can protect you and your family until it is safe to leave the area. Getting inside of a building and staying there is called “sheltering in place.”How deep underground do you have to be to survive a nuclear blast? ›
Building down to a depth of about ten feet will provide ample protection, but any deeper makes it hard to dig out in the event of a collapse.