Companies Failing to Keep Promises to Leave Russia

While the overwhelming majority of the 1,000+ global companies have kept their promises to exit Russia, we are disappointed that a small handful have seemingly reneged on their initial promises to leave. Here are some of the companies that have recently been downgraded on our list of companies leaving Russia for backtracking on their initial vows:

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• WeWork – the famous co-work space real estate company promised to leave Russia in March 2022 - but not only has WeWork not left Russia, anyone can continue to book a workspace in Russia on the WeWork app. (Downgrade from A - Withdrawal to D – Buying Time)

 

• Heineken – the beer giant promised to leave Russia in March 2022 - but continues to drag its heels on actually exiting, under the guise that it is awaiting Russian regulatory approvals for its sale to go through - even though 1,000+ global companies have seamlessly divested their Russian businesses without it taking 18 months and counting. Putting out statements every few months that "we are still trying to exit and intend to keep our word" is not the same as actually exiting - especially as Heineken is continuing to transact millions of dollars of business in Russia. (Downgrade from A - Withdrawal to D – Buying Time)

 

• Xiaomi – the Chinese cell phone giant (basically the Apple of China) initially sought to retreat from Russia post-invasion as was widely reported but then backtracked and stepped into the vacated footprints of their erstwhile western rivals who genuinely departed Russia, taking their market share and now Xiaomi has built a dominant position in the Russian smartphone market.  (Downgrade from A - Withdrawal to D – Buying Time)

 

• Reckitt Benckiser – the English consumer goods giant promised to exit Russia in April 2022, pledging to divest all assets, yet 18 months later they have not even found a buyer yet and barely seem to be making any effort to actually divest while continuing to do millions of dollars of business in Russia every day. (Downgrade from A - Withdrawal to D – Buying Time)

 

• Philip Morris – similarly, the tobacco giant promised to exit Russia in March 2022, promising to transfer ownership, but once again they appear to have done nothing in the time since. Worse than doing nothing, they have explicitly backtracked with the CEO claiming he cannot find any buyers and that the regulatory constraints are too onerous - even though that did not stop 1,000 global peer companies from exiting. (Downgrade from A - Withdrawal to D – Buying Time)

 

• Mondelez – Mondelez has promised time and time again to evolve the Russian business into a "stand-alone", whatever that means, yet it shows no tangible signs of progress towards exiting and continues to transact in Russia despite global boycotts. (Downgrade from A - Withdrawal to D – Buying Time)

 

• Unilever – Despite ample consumer boycotts, Unilever continues to sell consumer goods into Russia under the guise of “essential” products, like other consumer goods giants – though Cornetto ice cream hardly seems essential. (Downgrade from C – Scaling Back to D – Buying Time)

 

• Nestle – The Swiss consumer goods giant promised to sell only “essential” products into Russia, citing baby formula as an example, but the reality is they continue peddling pet foods, pralines, chocolate bars, and other items that are hardly essential. (Downgrade from C – Scaling Back to D – Buying Time)

 

• Alibaba – despite some initial speculation about pulling back from Russia, this huge Chinese ecommerce retailer continues to operate in Russia through its AliExpress joint venture with ample sales into Russia and a freely accessible Russian website which continues to show fresh new daily discounts. (Downgrade from D – Buying Time to F – Digging In)

 

• Babolat – The French tennis racquet manufacturer claims to have ceased doing all business with Russia, but a closer examination reveals a more muddled reality. Babolat’s activities in Russia have long been carried out by an independent local distributor, with whom Babolat has apparently ceased all business transactions. However, Babolat’s local distributor continues to sell Babolat products and represents themselves as a Babolat affiliated distributor, with apparently a never-ending stream of Babolat products seemingly extending far beyond normal inventory. (Downgrade from A - Withdrawal to F – Digging In)

 

• Carl’s Jr. – Bafflingly, the fast-food chain not only continues to do business in Russia after vague reports of possible withdrawal but is proud of it, posting Russian-language advertisements featuring striking Russian models eating French fries to its Instagram page as recently as a day ago. Indeed, its Russian Instagram page has posted nearly daily advertisements every day for the last year, showing Russians – overwhelmingly striking young females - feasting on American fast food as if there was nothing out of the ordinary.  (Downgrade from D – Buying Time to F – Digging In)

 

• Emirates and Etihad Airways – Many Middle Eastern and South Asian airlines have taken advantage of the fact that western airlines no longer fly over Russian airspace by shamelessly stepping into vacated western carrier routes and offering shorter, cheaper routes than western airlines are now able to do. These flights, ironically filled with western travelers are undermining US air carriers, and paying flyover fees to Russia. However, the risk of flying over Russia is that when flights are occasionally diverted or grounded in Russia, western passengers are essentially stranded and in greater peril.  (Downgrade from D – Buying Time to F – Digging In)

 

• Guess – While other peer companies are flocking to the exits, this clothing giant is inexplicably doubling down on its Russian investments by reacquiring stakes in its Russian business from local partners while apparently increasing revenues significantly post-invasion.  (Downgrade from D – Buying Time to F – Digging In)

 

• Huntsman Corp – The chemicals giant stubbornly refuses to exit Russia under the guise of caring for its Russian employees, but at this point there is no compelling excuse when every competitor has exited, while throwing out ambiguous promises that they will try to complete the wind down of Russian operations by the end of 2023 – a ridiculously slow timeline. (Downgrade from D – Buying Time to F – Digging In)

 

• Sbarro Pizza – Despite claiming to no longer be in Russia, the casual pizza chain’s locations webpage continues to advertise its Moscow site in addition to recent expansions in Russia with its local operator partner. (Downgrade from A - Withdrawal to F – Digging In)

 

• Shell – Although the energy giant pledged to suspend new purchases of Russian commodities, they are continuing to fulfill existing contracts, taking huge amounts of Russian gas that is crucial to Putin’s revenues. (Downgrade from D – Buying Time to F – Digging In)

 

• TGI Friday’s – All TGI restaurants in Russia are owned by independent franchisees, and TGI Friday’s argues that those local franchisees have made the decision to stay open while TGI Friday’s has withdrawn. However, other franchise-based companies such as Starbucks bought out their franchisees at the start of the invasion and these franchises continue to use the sterling TGI Brand.  (Downgrade from D – Buying Time to F – Digging In)