What is it with the French and the EU?
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 for the sanctions but it turns out yet again many French businesses are continuing to trade.
This report shows how this trade emasculates the EU sanctions regime and gives comfort and income to Putin.
On Friday I reported on how both the EU and France are breaking the arms embargo on Russia
with sales of military equipment worth €234m to Russia between 2014–2020. In this analysis, I look 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 carmaker 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
Philippe Zimmermann, CEO, Adeo (owner of Leroy Merlin and Bricocenter — the largest DIY holding company in Europe)
“There is no reason to condemn our Russian teams for a war they did not choose. There is no reason to turn away 45,000 employees representing more than 100,000 people with their families. There is no reason to stop being useful to Russians who need to repair, insulate, insure, protect and light their homes. We sell them essentials. It is our responsibility as employers and companies.”
- Adeo’s chief executive, Philippe Zimmermann in a video address to employees, 23 March 2022
- 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 busted 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 revealed how France had found means to defeat the EU arms embargo on 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 doorknob 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.
I spit on the EU and on France. I was not buying much French produce as it is, our family car which we should have changed last year but because of the pandemic didn't is Renault. We will now go out of our way not to buy any car made in France or the EU. You either stand against tyranny or you dont and those that dont dont should feel the full force of each and everyone's contempt.
Sources: L’Assemblée Nationale (French parliament) | CCI France Russie (Chambre de Commerce et d’Industrie Franco-Russe) | Tass (Russian state news agency | Wall Street Journal | New York Times ]
