Western companies that have stayed in Russia. What are their risks and concerns?

Consumers in Russia can still buy Western brands, because not all companies have decided to leave the country. And even if they change their minds in the face of growing legal and reputational risks, they will face another challenge – the Kremlin wants to make leaving Russia more difficult and, above all, more expensive, according to Paulina Piwowarek on the Portal Spożywczy Poland.

Companies responsible for workers at plants in Russia

Large companies that have decided to stay in Russia, such as Procter & Gamble and Unilever, have a complicated balancing act to manage – they must protect their financial results and local staff and not be compromised, even if they pay taxes to the Kremlin.

For example, outgoing Unilever CEO Alan Jope said he was responsible for 3,000 workers in Russia and that he did not want Unilever’s four domestic manufacturing plants to fall into the hands of pro-Kremlin tycoons or the Russian state.

Last week, Carlsberg warned that its plants could be nationalised if production stopped. Kremlin spokesman Dmitry Peskov responded by stressing that there are the laws for the protection of workers.

Companies suspend decisions to leave Russia

Bloomberg gives more examples of companies that are changing their strategies for exiting the Russian market.

Reckitt Benckiser, the owner of such brands as Strepsils, Nurofen, Enfamil, already in April 2022 announced that it intends to transfer its plants in Russia to another entity or local employees. However, it hasn’t done that yet.

Danone announced its exit from Russia in October, but is still looking for a buyer for its assets.

Philip Morris International announced a similar step at the end of last year. However, it is still trying to obtain the consent of the Russian authorities.

Few companies have been as firm as McDonald’s, which sold its Russian restaurants to a local investor in May 2022. But such a move is no longer that simple. There are fewer potential buyers who are not subject to sanctions, and the Kremlin is increasingly reluctant to approve the sale of Western assets.