A year has passed since Russia invaded Ukraine, but Moscow residents can still buy Activia yogurts, Oral-B toothbrushes and L’Oreal cosmetics, and many consumer goods are still supplied by European companies and American companies with subsidiaries in Russia, according to Bloomberg . , quoted by Agerpres.

In addition, if these companies decide to continue operating in Russia, given the increased risks to their reputation, they will face a new challenge after the Kremlin made it more expensive to exit the Russian market.

Even if Western sanctions do not affect the consumer goods sector, restrictions imposed on Russian banks and certain individuals in Russia have made it difficult for Western companies to operate in that country. Under these conditions, companies such as Colgate, Procter & Gamble and L’Oreal must balance business and the income of local workers with the risk of compromising their image by paying taxes to the Kremlin.

An example of this is Unilever CEO Alan Jope, who has said that he has a responsibility to his 3,000 employees in Russia and that he does not want Unilever’s manufacturing facilities in Russia to end up in the hands of an oligarch with ties to the Kremlin, or even of the Russian state.

Many of the promised departures have not yet taken place

Danish brewer Carlsberg also warned on Thursday that there was a risk that Russian authorities could nationalize the business to keep staff at pre-war levels if they suspected the business was being deliberately devalued.

These challenges may explain why many of the promised waste products of Western companies have so far not materialized. For example, the Reckitt Benckiser Group, maker of Strepsils, announced last April that it would transfer its Russian business to a third party or local staff, but has not yet done so. The French group Danone announced its exit from Russia in October, but has not yet found a buyer.

Another factor is the fact that the Russian economy is not doing as badly as expected, contracting only 2.5%, and there is still money to be made, at least in the long run. On Thursday, Unilever executives warned investors about the financial risks associated with exiting the Russian market.

Chocolate, “a product of everyday life, vital for Russians”

To stay in and take advantage of what may still be a lucrative market, Western companies have taken a number of precautions, such as devolving power to local managers, halting advertising and investment, and conducting audits to avoid doing business with banks and individuals. were subject to sanctions.

Company managers also think about the future. “I want to give my successor the opportunity to make a decision one day if the situation in Russia changes radically and becomes stable,” says CEO of Carlsberg Sees ‘t Hart.

Other company executives are more resourceful when it comes to justifying the contours of operations in Russia. Confectionery manufacturer Mondelez called Milka chocolate an everyday, essential product for Russians. “We sell chocolate and cookies. In many countries, cookies are a breakfast item. Therefore, we believe that we offer products for the average consumer in Russia,” says CEO Dirk Van de Put.

The risk of being unwittingly drawn into Russia’s military operations

But no matter how difficult it is to leave the Russian market, staying in this market carries certain risks. French group Bonduelle was forced to deny allegations late last year that the company supplied canned vegetables to the Russian army after a Russian soldier posted the photo on social media. The incident has alarmed other Western companies still operating in Russia.

Companies that sell food or personal care products run the risk of being unwittingly drawn into hostilities, especially if Russia moves to a “war economy.” Kremlin spokesman Dmytro Peskov denied that these companies would be forced to participate in military operations. However, mobilization orders were sent to workplaces with the mobilization of 300,000 additional reservists and multinational companies that had lost workers through mobilization and emigration.

The expected resumption of hostilities in the spring may increase the concerns of companies, both in Russia and in the companies’ countries of origin.