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So, my newsfeed had an item about "H&M" stopping selling things to Russa, as well as a score of other random retailers (Nike? etc...).

I can sort of see the possible argument about efficacy of a (self) ban on Google or Apple's side, given their scale and impact in daily life of people.

But a random clothing retailer and such? Leaving aside pure posturing to generate good will with their Western customers, is there any meaningful purpose in stopping selling consumer goods to Russia? It seems counter-productive actually - if they sell to Russia, they hopefully syphon more hard currency out of Russia's financial ecosystem.

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  • Comments deleted. Please remember that the primary purpose of comments is to discuss the question itself, not to discuss its subject matter or to answer it.
    – Philipp
    Mar 4, 2022 at 10:05
  • Are you talking about the manufacturers' or western governments' purposes? Mar 5, 2022 at 1:04
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    @KeithMcClary - manufacturers (or even more specifically, retailers, but I doubt there is too much meaningful difference)
    – user4012
    Mar 5, 2022 at 4:36

4 Answers 4

49

For foreign companies to stop selling goods, consumer or commercial, (as well as to stop buying Russian products) is an excellent way to make Russian citizens realize that a war is going on.

There is no independent media in Russia whatsoever. Over half the population gets news from state-censored television, which broadcasts propaganda not news. I was born and raised in Ukraine and got my bachelor of science degree in Russia; therefore, I have friends and relatives in both countries. As a child I lived in the USSR, so I'm very familiar with how total propaganda works. Smarter people saw the inconsistencies in the state propaganda, but too many people just believed whatever they were told.

This tactic has been used many times in the past. In addition to the Soviet Union, Nazi Germany also sought to justify their wars in the eyes of its population. It's never "let's occupy Czechoslovakia and Poland", it's "let's protect our German brothers living there." It's never "let's occupy Eastern Europe", it's "let's help workers free themselves from capitalists." Or, in the near future, it may be "let's help Taiwanese citizens in their unspoken desire to unify with China." If you completely control the media you control the perspective, no matter how untrue it is.

Many Russians don't believe there is a war waged by Russia against Ukraine. They were told untrue propaganda of civil unrest in Ukraine, e.g. that Russia has nothing to do with fomenting civil unrest, and that Ukrainian Nazis are committing genocide of ethnic Russians, and that Russia has no alternative to protect its brethren other than a limited friendly peacekeeping action. All of it is completely false, but many Russian citizens have no access to fact-based news media, thus no way to determine whether these narratives are false and biased. So, they believe it.

For example, see this BBC article (4 March 2022), Ukraine war: 'My city's being shelled, but mum won’t believe me'

It's common for Ukrainians to have family across the border in Russia. But for some, like Oleksandra, their Russian relatives have a contrasting understanding of the conflict. She believes it's down to the stories they are told by the tightly-controlled Russian media. Oleksandra says her mother just repeats the narratives of what she hears on Russian state TV channels.

"It really scared me when my mum exactly quoted Russian TV. They are just brainwashing people. And people trust them," says Oleksandra. "My parents understand that some military action is happening here. But they say: 'Russians came to liberate you. They won't ruin anything, they won't touch you. They're only targeting military bases'."

On Russian state TV channels on the same day, there was no mention of the missiles striking Kharkiv's residential districts...

There are many other accounts of similar stories in the BBC article.

One way to get through propaganda is to impact the supermarket shelves. No matter what the TV says, if most imported goods have disappeared from the supermarkets, you know that something's amiss. If, furthermore, you cannot buy domestic because the business went belly up, you pay even more attention. The latter is the reason why many American businesses halted imports from Russia.

The few who have access to information are already leaving Russia. Most of Russia's oligarchs fled Russia within days of the invasion, but not after losing half of their investments. Economic pressure is effective; halting business in both directions makes people reconsider their options. Per comment, here's the source about oligarchs fleeing Russia; these are tracks of oligarch's planes flight paths, from townandcountrymag.com:

Tracks of oligarchs' planes.

ADDED: it looks like the sanctions against average people started to work a little. Here's an interview with Baronova, a former head of a Russian state controlled news organization who just quit over the war. This is what she says, among other things:

“People were in favor on [the] first day of invasion. Now they are less convinced and much more skeptical because they understand now that they are going to lose their jobs, they are going to lose their cars, their iPhones, their everything,” she said. “So, let’s see what that are going to say in a month … The whole world is in a bad position.”

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  • 17
    I agree with everything you've said, but "text messages from a fallen Russian soldier's cellphone" looked incredibly fake to me. There is a large body of other evidence supporting your points available on the Internet, though. Mar 4, 2022 at 7:06
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    If you object to the text messages (I've not seen them myself) there is plenty of other evidence of Russians believing the state media over the word of their own family (or at least, claiming to - there is, of course, the possibility that they will stick to the government line in their communications out of fear of being spied on and punished, whatever they may believe in private).
    – psmears
    Mar 4, 2022 at 11:30
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    While many parts of this answer are close to truth (for example, censorship), the conclusion is wrong. Why denying goods will open the eyes of brainwashed people? It will only strengthen the propaganda - "we are betrayed by the West and surrounded by enemies!". People will become angry and bitter, true. But government has a lot of means to direct that anger to the West. Another consequence will be closer ties with China who will further replace western producers. Mar 4, 2022 at 16:27
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    @Michael Left in a vaccuum, sure. But you seem to forget what your own answer itself spends a lot of time on: the propaganda machine. Sanctions don't make that machine suddenly disappear. It spurs it into overdrive, and as Alex says the simplest and seemingly most effective way to deal with things is to go "look at what the evil West is doing to our great government and countrymen". North Korea's been sanctioned and isolated half to oblivion, but there's zero indication the dictatorial regime has gotten any weaker. It might be stronger, exactly because of this sort of propaganda. Mar 5, 2022 at 6:06
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    There's no reason whatsoever they wouldn't aggressively push a narrative that says that the West/whoever hates us and is trying to kill us and the only way for us to get through this and show them our will and refusal to be run over is to get behind the autocracy 100%. Putin/whoever becomes the glorious stalwart protector. They'll phrase it as the only way to get through this: an existential threat needs a strong, powerful leader with the support of his people; else you die. That's Authoritarian Propaganda 101; it's often how an authoritarian regime gets started in the first place, too. Mar 5, 2022 at 6:11
25

I suspect it's a combination of being seen in a good light in the West and actual operational difficulties. Some companies have mentioned the latter too:

Burberry said it was putting all shipments to Russia on hold, due to 'operational challenges', adding that it was keeping a close eye on the situation.

Due to SWIFT restrictions combined with Visa/Mastercad boycott of Russia, and compounded with Bank of Russia's own FX and capital movement restriction that were imposed in response, international transactions are probably difficult or at least uncertain at the moment.

Also MAERSK essentially announced an embargo, so physically getting some products in may become a challenge.

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    That's correct. In the case of turmoil companies try to minimize their risks. Right now RUB is in a wild ride and no one can predict what the next day will bring. So companies halt their operations. I remember Apple doing the same (closing the online store) last time RUB was in turmoil. Also it is not a boycott from Visa/MC, it is an implementation of the concrete sanctions imposed on concrete institutions.
    – ixSci
    Mar 4, 2022 at 9:26
  • @ixSci: true, Visa/MC had only a selective boycott then, limited to the banks they were required to exclude due to sanctions. They've announced a total one this weekend. rfi.fr/en/visa-mastercard-suspend-operations-in-russia Mar 6, 2022 at 5:54
  • Yep, now they officially stopped operations in Russia. I'd not call it a boycott (Namecheap boycotted Russia, these are just doing their corporate doings) but that's semantics.
    – ixSci
    Mar 6, 2022 at 7:22
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Limiting losses, reputational damage in more important markets and avoiding extra costs are the key factors, but I suggest some slightly different ways of thinking about them to other answers.

Going one step further than some other answers, which euphemistically mention "operational difficulties", continuing trading put companies up against existing sanctions on the banking sector. It wouldn't look good in their core markets to appear to be breaking sanctions. It would also be costly to set up new payment arrangements.

With air sanctions in place and shipping sanctions increasing, getting goods to the market is going to cost more and take longer. By the time they've arrived, it's anyone's guess what the situation on the ground will be, but it's unlikely to be highly profitable.

On the other hand if trading conditions went back to normal soon, they could start selling/shipping again quite easily, there may even be some pent-up demand. This of course is far from likely, but it indicates that the losses from stopping trading now may not be so great in the long term.

The banking sanctions, transport sanctions, and economic conditions mean that profits would be hit pretty hard even if they carried on trading, so they may as well cut their losses.

Big Western brands in Russia will also be wary of retaliatory sanctions so won't want more physical property or money in Russia than they have to have. In other conflicts we've also seen businesses targeted both physically and electronically when they represent an ally of the enemy. This clearly threatens property and staff. Closing down operations reduces that risk in a way that staying open to sell existing (physical) stock doesn't. We're already seeing claims of hacker attacks on US brands from Russian groups. The US Cybersecurity and Infrastructure Security Agency is warning about threats from Russia-affiliated groups.

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    I’m glad you mentioned retaliatory sanctions. No one knows where this thing is going and what the next steps will be. Any exposure to Russia is a big risk in this kind of climate
    – divibisan
    Mar 4, 2022 at 15:38
  • Uncertainty about what will happen in the future is the big thing here additionally to sanctions, right? Mar 4, 2022 at 17:03
  • @Trilarion well, I'd say most EU-/US-based businesses can reckon have some certainty that their near/medium future in Russia won't be great. The issue is more one of how bad.
    – Chris H
    Mar 4, 2022 at 18:26
  • Good answer! Breaking sanctions is a crime. Initially, there is merely a fine. The U.S. Treasury won't allow businesses to continue doing it (i.e. as a "cost of doing business"). They will escalate. Dec 22, 2023 at 9:06
  • Good point @EllieKesselman. I think part of what I meant was that even for companies not hit directly by sanctions, they'd still have to get round banking sanctions. Of course at the time of writing things were developing fast, snd sector by sector
    – Chris H
    Dec 22, 2023 at 10:16
-2

Anti-Putin researcher Sergey Utkin in Moscow interviewed on CBC said 6:35 here that the sanctions would mostly affect the upper middle class who will not be able to take a plane, but it is not much change for the bigger and poorer part of the population.
So it affects a particular class. I will not speculate what purpose that serves.
EDIT: I was assuming you were talking about government sanctions on exports to Russia. If it is just a business decision, then obviously there would be no point in giving up sales. Of course, there may be extralegal pressures from governments to stop selling.

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    How is this in any way related to consumer goods which is what the question was about?
    – user4012
    Mar 5, 2022 at 4:33
  • I think most Russians could afford to shop at Ikea and H&M. (Ikea was also producing cheap furniture in Russia itself.) It's true that a number of luxury retailers have also curtailed their sales. Mar 6, 2022 at 7:37

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