Kyiv slams French retailer Auchan over Russia operations

French supermarket chain Auchan was accused of being a "weapon of Russian aggression" by Ukraine on Friday after media reports that its shops had been used to supply goods to the Russian army.

The revelations in Le Monde newspaper in France and investigative websites Bellingcat and The Insider cast a fresh spotlight on the Mulliez family which owns Auchan as well as DIY chain Leroy Merlin and sports retailer Decathlon.

Estimated to be France's eighth wealthiest, the family has resisted public pressure to stop trading in Russia despite the risks of being linked to the Kremlin's invasion of Ukraine.

The reports said employees at Auchan in Russia had collected store goods worth 2 million rubles ($27,000), including woollen socks and gas bottles, which were sent to soldiers marked as humanitarian aid.

"Last year, I urged the world to boycott Auchan for failing to withdraw from Russia and stop funding war crimes," Ukrainian Minister Dmytro Kuleba wrote on Twitter in reaction.

"However, the reality seems to be far worse: Auchan has evolved into a full-fledged weapon of Russian aggression."

The company said it was "very surprised" by the allegations.

"We are in the process of checking the assertions but to date the facts in our possession do not corroborate" the investigation, the group said.

"We do not voluntarily and actively fund or participate in any fundraising for Russian forces," the group said, adding that Auchan Ukraine had provided assistance to Ukrainians worth around $1.6 million.

Auchan's Ukraine branch said it was "shocked" by the reports in a statement on Facebook.

- Moral imperative? -

Auchan has a long-standing presence in Russia, which accounted for about a tenth of its global sales before the war.

Ukrainian President Volodymyr Zelensky called out the brand and Leroy Merlin in a speech to the French parliament in Paris on March 23, saying they "must stop sponsoring the Russian war machine."

Around 500 French companies had operations in Russia before the war, making them collectively the biggest foreign employers in the country, according to the French economy ministry.

But bluechip companies such as Renault have followed major international peers such as Apple and McDonald's by selling their local operations.

The Mulliez family company, based in the industrial northern town of Roubaix, argued that Auchan was remaining in order to sell "essential food items" to Russian consumers.

The head of Leroy Merlin's holding company argued that selling up would be making "a gift of the company and its activities to the Russian regime."

But Ukraine's government and many campaigners believe Western companies have a moral imperative to quit the country given President Vladimir Putin's war of aggression.

"A lot of people are trying to blow smoke at us in the West to justify keeping their assets in Russia," anti-Kremlin campaigner Bill Browder told AFP last month.

"But it's a totally immoral position to take. It's like holding assets in Nazi Germany after they started exterminating the Jews."

- Not an exodus -

Despite some highly public departures, only a small number of Western companies have actually deserted Russia, according to a Swiss study published in January.

Researchers at the University of St. Gallen and at the IMD institute in Lausanne said that less than 10 percent of EU and G7 companies with Russian subsidiaries had divested them.

French energy giant TotalEnergies has also faced critical media coverage of its operations in Russia.

Le Monde claimed in August last year that a partially Total-owned gas field was producing products that were eventually refined into jet fuel for Russian fighter planes.

Although it denied the allegations, it announced plans to sell its stake in the field afterwards and has since withdrawn from the board of its Russian partner, Novatek.

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