In a few days, the Russian invasion of Ukraine is coming to an end, and many Western business giants who have promised to leave Russia are still there, operating in its market and profiting from it. Russians can still consume Activia yogurts, brush their teeth with Oral-B electric toothbrushes, and pamper their skin with L’Oreal cosmetics. Some of these products are from the good old days before the invasion, but not all. Many others still exist on the Russian market simply because they continue to be produced by subsidiaries of American and European companies.

And if any of them want to leave Russia under pressure from legal issues or to save their reputation, they will have to face the increased costs associated with this.

While there were no sanctions in the consumer goods sector, restrictions on Russian banks and individual Russian entrepreneurs made doing business within the country much more difficult. Groups that have chosen to stay, such as Colgate, Procter & Gamble and L’Oreal, are trying to protect their operations and their employees inside Russia, to maintain their presence in this large market, but not to characterize their choice as morally reprehensible. even though they pay taxes to the Kremlin. Alan Job, Unilever’s outgoing CEO, says he has a responsibility to the company’s 3,000 Russian employees, but he doesn’t want its four manufacturing units to fall into the hands of tycoons friends of the Kremlin. Difficulties like these explain why many companies that promised to leave have not yet left Russia. Reckitt Benckiser, which produces Strepsils lozenges, has announced since April that it was transferring production to another company or its employees in Russia, but did not fulfill the promise. Danone also announced in October that it was pulling out of Russia, but has yet to find a buyer. And Philips Morris International, which produces cigarettes and tobacco, planned to leave the country at the end of last year, but has still not received permission from the Russian state.

The Russian government has imposed severe restrictions on takeover deals by Western companies and requires the sale to take place at a 50 percent discount.

Few companies have been as determined as McDonald’s, which sold its restaurants last May, just three months after the war began. But now it is not so easy for other businesses to do the same. There are very few potential buyers who are not subject to sanctions, and the Kremlin is showing increasing reluctance to approve the sale of Western businesses. “The longer a company is gone, the more difficult it becomes,” said Nabi Abdulaev, a partner at consulting firm Control Risks, who notes that the government has imposed serious restrictions on takeovers of Western companies and requires the sale to be made at a 50% discount. On top of all this, however, there is a profit factor as the Russian economy ended up not being hit as hard as expected, shrinking by just 2.5%. In short, they still have a lot to gain from the Russians.

Last week, Unilever warned its investors about the financial risks of a potential exit from Russia, while British American Tobacco raised its forecasts of potential losses in the event of an exit. In order to stay on the Russian market, since it can still be profitable to work there, companies go to many maneuvers. They give power to local business leaders, no longer advertise and stop investments, while consulting sanctions advisory committees to avoid any collaboration with blacklisted banks or businessmen. Unilever, Colgate and P&G have defended their decision to stay in Russia in order to supply the Russian market with only “basic” or “essential” products. However, they have not yet announced which products they have and which are no longer on the Russian market. P&G, which has two production divisions in Russia, has given seats to the heads of Russian companies on the boards of directors. companies. And as its sales in the Russian market have fallen, it has reduced its workforce from 2,500 to 1,800 from the end of March to the end of 2022. L’Oreal, which still has 2,500 employees in Russia, closed several stores and cut production. , but still supplies its cosmetics to Russians.

As difficult as it is for a business to leave Russia, staying there is fraught with problems. French pea and corn producer Bonduelle denied in December that it was supplying the Russian armed forces. A photo of a Russian soldier consuming her products has gone viral on social media. Perhaps this was a warning to other Western enterprises that remained in Russia.