Russia: the war in Ukraine deals a deathblow to Auchan – 04/08/2022 at 14:25

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The brand’s stores have closed in Russia due to lack of supply. But the choice was complicated for the company, which chose to maintain its presence in the country.


The French brand has been present in Russia since the 1990s. (AFP / NATALIA KOLESNIKOVA)

A flood of complications for Auchan. The French brand has long displayed an insolent success in Russia where it is established in a lucrative but difficult market. Other foreign channels have failed. But, for several years,

the French retail giant has a string of setbacks

from corruption charges to controversy related to the conflict in Ukraine.

In 2002, the first Auchan hypermarket in Russia opened in the suburbs of Moscow. The French group then arrived on a market where

everything is to be (re)built, after the collapse of the 1990s

. Through takeovers, he consolidated his presence, opening hundreds of stores over the years. At the same time, the group gained a foothold in neighboring Ukraine from 2008, the year that marked the opening of its first hypermarket in kyiv, followed by a second in Donetsk – currently in territory controlled by pro-Russian separatists.

Corruption scandal

From the mid-2010s, the Russian sky darkens:

Auchan begins to record losses

in the country, sales are falling and stores are closing. The French giant is slow to adapt to new formats and fierce competition from local channels like the giant X5. In 2019, its activity in “Central and Eastern Europe”, including Russia, still represents 20% of its total turnover, or 9 billion euros. In December 2021, Auchan Russia had 231 stores across the country, including nearly one hundred hypermarkets. But, at the beginning of 2020, the storm broke: the newspaper

The echoes

reveals a large-scale corruption scandal, quoting lawyer Alexei Jarkov, a time employed by the group in an anti-corruption team.

The latter affirms to the French daily

being “beaten in the head with an iron bar”

and suspects “one of the five corruption networks he discovered to be behind his attack”. According to Alexei Jarkov, quoted by

The echoes

, “between 80 and 100 million euros, or 2 to 3% of the turnover achieved in Russia, are siphoned off each year”. “We could not

place products at Auchan without paying

“, says Alexei Jarkov again to AFP in April 2022. “The problems of corruption continue”, he adds, believing that the scourge is “quite widespread” in the large Russian distribution.

In March 2020, Auchan is trying to regain control:

he admits he faced bribery but claims it ‘dealt with’

, adding “not having knowledge” of its persistence. Alas, the group is talked about again when

The echoes

reveal that Auchan uses lie detectors to fight corruption, a common practice in the sector in Russia but shocking in France. In the wake of these revelations, the German boss of the Russian subsidiary of Auchan, Johannes Tholey, who had confirmed to AFP the use of these devices, landed. Cultivating a culture of secrecy, Auchan communicates in dribs and drabs – the group has repeatedly refused interview requests made by AFP.

113 stores and 45,000 employees

On February 24, the Russian offensive launched in Ukraine deals a new blow to Auchan, while the signs of the Mulliez galaxy are major employers in the country of Vladimir Putin: 45,000 employees and 113 stores for Leroy Merlin, 30,000 employees and 232 stores for Auchan, 2,500 employees and 60 stores for Decathlon. These have since closed due to lack of supply. But Auchan, while evoking a difficult choice, decides to stay.

This choice is denounced by kyiv, which calls for a boycott of the brand’s stores. It was Ukrainian President Volodymyr Zelensky himself who asked the group to leave Russia, sparking controversy in France. Yves Claude, the CEO of Auchan, answers it in the weekly JDD. “These words are unfair,” he said, claiming to want to “preserve” the group’s employees (30,000 in Russia, editor’s note) and ensure its “primary mission which is to continue to feed the populations in these two countries”. Auchan has suspended its investments in Russia, and its subsidiary now operates there “in autarky”, he pleads.

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