Major multinational companies initially announced plans to leave Russia after
the Ukraine invasion.
However, the remain stuck due to bureaucratic hurdles and a
50%
discount mandate on selling assets to unfriendly countries.
This, combined with a minimum 15%
exit tax has complicated departures.
The Kiev School of Economics reports that over 2100 MNCS
have stayed in Russia since 2022.
While initial focus was on leaving Russia to isolate its
economy,
the situation has evolved. A surprising consumer spending boom in
Russia has made it more attractive to some businesses,
particularly in consumer goods. Companies like Mondelez are revaluating with
the CEO stating investors are less concerned about the morality
of remaining.
Food and beverage companies face a unique challenge as well.
They emphasize the humanitarian responsibility to maintain basic food supplies.
Coca-Cola, for example, continues operating a Russian bottler that manufacturers
Dobri Cola,
now the top selling cola in Russia.
This raises questions about brand dilution,
despite the company distancing itself from the goods.
Meanwhile, PepsiCo maintains its dairy business in Russia,
citing the needs of its 60,000 employees.
The overall picture is quite complex.
Western companies grapple with moral obligations,
economic realities and the potential consequences of leaving,
as seen in Carlsburg's ongoing legal battle and imprisoned executive.
The initial exodus may have stalled,
with companies revaluating their positions in Russia's evolving economic landscape.