Heineken, Lufthansa Technik, Mothercare among latest to exit Russia

Photo: Sebastian Gollnow/dpa

(dpa) March 9, 2022 – The list of businesses cutting their ties to Russia grew longer on Wednesday, leaving Russians with access to yet fewer Western products and services as the world severs trade ties in anger at Russia’s invasion of Ukraine.

One of the latest businesses to announce it had slammed the door shut was the maintenance subsidiary of Lufthansa, which is no longer servicing planes for Russian customers.

The chief executive of Lufthansa Technik, Johannes Bußmann, made the announcement during the presentation of its annual numbers on Wednesday. The subsidiary has contracts with about a dozen Russian airlines, which means an end to service could affect about 400 aeroplanes and lead to a loss of €240 million ($261.3 million) in sales.

Also exiting the market were beer giant Heineken and cigarette maker Imperial Brands, according to Britain’s Press Association.

Imperial, which markets JPS and Davidoff cigarettes, said it was pausing production at its factory in Volgograd, alongside all sales and marketing activity in the country, in a move impacting around 1,000 employees. Russia and Ukraine together account for about 2% of Imperial’s net revenues.

Meanwhile, Dutch brewer Heineken said it was stopping the production and sale of its own brand beer in Russia.

French multinational rolling stock manufacturer Alstom SA decided on Wednesday to shut down its business in Russia to protest the invasion of Ukraine, announcing the suspension of all deliveries as well as future investments in the country.

The move comes in response to the economic sanctions imposed on Russia by the US and its allies.

Alstom owns a 20% stake in Transmashholding as a capital investment.

The French firm has also clarified that there was no material business and operational link between the two companies.

The rolling stock maker was forming a partnership project with UZ, a Ukrainian rail operator. However, the discussions on the project have been suspended.

British retailer Mothercare, which sells products for young children, also announced on Wednesday that it had suspended all its businesses in Russia, including shipments, with immediate effect. Russia represents around 20% to 25% of Mothercare’s total retail sales worldwide.

The finance arm of German luxury carmaker Mercedes-Benz also announced it had discontinued its business in Russia on Wednesday, but would continue to serve customers in the country with existing contracts.

Mercedes-Benz announced last week that it would stop its vehicle exports to Russia as well as its production there for the time being. The Stuttgart-based company has a plant near Moscow employing over 1,000 people.

Meanwhile German arms manufacturer Heckler & Koch has transferred a small number of employees with Russian backgrounds at its main plant.

The employees in question work in the weapons testing area of the company’s Oberndorf plant, and their transfer was done with the “duty of care for our employees” in mind, the company said.

According to a local newspaper report, the transferred employees reacted with incomprehension and disappointment, and their trade union is currently looking into the matter.