A Couche-Tard convenience store in Montreal, on Jan. 13, 2021.CHRISTINNE MUSCHI/Reuters
Global convenience store giant Alimentation Couche-Tard Inc. is suspending operations in Russia after a nearly three-decade run, the latest Canadian company to sever ties with the country amid escalating reputational and financial risks for Western multinationals.
Couche-Tard, owner of the Circle K chain, will wind down operations effective immediately and implement plans to take care of its employees in a responsible and safe manner, the Laval, Que.-based company said in a statement early Monday. It did not provide any details on the assistance it is giving staff.
Couche-Tard joins streaming service Netflix Inc., social-media company TikTok, and credit-card operators Mastercard Inc., Visa Inc. and American Express Co. in suspending operations in Russia in recent days as the corporate exodus from the country continues. On Monday, Toronto-based commercial real estate firm Colliers also confirmed it has discontinued its business in Russia and Belarus after more than 28 years of operations.
The world’s biggest companies are pulling out of Russia. A look inside the global corporate shunning
“We condemn Russia’s aggression against Ukraine and the huge human impact it is having for both Ukrainians and Russians,” Couche-Tard chief executive officer Brian Hannasch said in the statement.
“I am appalled and saddened by the unnecessary loss of life and the displacement of millions of Ukrainians from their home. We cannot and will not stand idly by,” Colliers CEO Jay Hennick said.
Canada and its Group of Seven allies have decried what they call an unprovoked attack and slapped Russia with a battery of sanctions, including prohibiting transactions with Russia’s central bank. That has put tremendous pressure on companies in those countries to stake out their own positions or face a social and consumer backlash.
For Couche-Tard, pulling back from Russia means reversing course after three decades of investment into the former communist country. It is present in Russia by way of Norway’s Statoil Fuel and Retail, which Couche-Tard took over for about US$2.6-billion in 2012 after parent Statoil ASA hived it off as a separate company two years earlier.
When the Soviet Union broke up, Statoil positioned itself as a leader in developing the market economy of the Eastern Bloc, by establishing itself in the Baltic countries, Poland and Russia, according to a biography of Couche-Tard executive chairman Alain Bouchard by author Guy Gendron. “Selling oil to Russians! It took some nerves,” Mr. Gendron wrote.
To open its first store in the Baltic states, Statoil needed to obtain written approval from Moscow. The first Statoil service station opened in Riga in 1992 and for years, while the countries established a functional economic and financial system, customers could only make their purchases in foreign currencies such as American dollars and deutschmarks – no Soviet rubles, even though it was the official currency, Mr. Gendron wrote.
Statoil set up its first store and service station in Russia in 1993, in the city of Murmansk, north of the Arctic Circle. Couche-Tard continued doing business there and now employs 320 people in the country at 38 stores in St. Petersburg, Murmansk and Pskov.
Several other Canadian companies have announced in recent days their intentions to detach from the Russian market, including Kinross Gold Corp., Magna International and Bombardier Inc.
The war is also having an effect on the internal governance at Russian companies. On Monday, Russian gold miner Nord Gold PLC lost four board members, part of a larger exodus of foreigners from Russian boards. British corporate filings show the nationalities of the former board members as British, Australian and South African.
Nordgold operates nine mines in Russia, Kazakhstan, Burkina Faso and Guinea, and four exploration projects, including one in Canada. The Pistol Bay gold exploration project, started in 2011, is near Nunavut’s Whale Cove Inuit community, on the western shore of Hudson Bay.
Nordgold is majority owned by the family of Alexei Mordashov, one of Russia’s wealthiest men. The European Union sanctioned Mr. Mordashov over the Ukraine invasion, and he resigned from some corporate boards last week, including the board of Nordgold. However, his wife, Marina Aleksandrovna Mordashova, retains ownership of more than 50 per cent of the company’s shares.
Among other investments, Mr. Mordashov also owns part of the company that has 49-per-cent ownership of Toronto-based Sunwing Airlines.
Couche-Tard said it has already donated more than US$1.5-million to the Red Cross and has instituted a global campaign to raise further funds for the Ukrainian people. The company said since the beginning of the crisis, local Circle K teams in Poland, the Baltics and across the European network have been supporting refugees with free fuel, food and beverages, housing and donations to children’s charities.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.