(Reuters) – Encouraging foreign brands to return to Russia would be “ill-advised,” according to the industry and trade ministry, which wants to champion domestic companies that have stepped in to fill the gaps left by departing Western counterparts.
More than a thousand companies, from McDonald’s to Mercedes-Benz, left Russia in the last three years by selling, handing the keys to existing managers, or abandoning assets.
Others like Danone and Carlsberg had their assets seized and a sale forced through.
But as Moscow and Washington discuss a path to end the war in Ukraine, one of the many questions on investors’ minds is whether the corporate exodus from Russia, triggered by the February 2022 invasion of its neighbour, may be reversed.
“The Ministry of Industry and Trade considers it ill-advised to stimulate the return of foreign brands,” it said in a statement to Reuters on Thursday.
“In the last three years, domestic companies have significantly increased their own production and actively occupied market niches vacated after the exit of foreign companies.”
Russian businesses have been successfully importing requisite goods through indirect means, the ministry said..
“The return of foreign companies and investors to Russia is possible only on terms favourable to us,” the TASS news agency quoted Deputy Prime Minister Alexander Novak as saying. “We must be guided solely by our national interests.”
First Deputy Prime Minister Denis Manturov said Russian producers would have absolute priority in sectors crucial for Russia’s technological sovereignty, the RIA news agency reported.
French automaker Renault, which agreed a six-year buyback option when selling its majority stake in Russian carmaker Avtovaz in May 2022, on Thursday said the probability of activating its clause with Avtovaz was “very, very low.”
“If any foreign company decides to return to the Russian market, then this issue should be considered on an individual basis,” the ministry said.
(Reporting by Gleb Stolyarov; Writing by Alexander Marrow; Editing by Rachna Uppal and Hugh Lawson)
