Ukraine labels German wholesaler Metro as 'sponsor of war'

German wholesaler Metro faces heightened criticism from Ukraine's NACP corruption watchdog and concerned citizens over its decision to continue business operations in Russia.

Justifying the addition of the wholesaler to its so-called list of international sponsors of war, Ukraine NACP tweeted that Metro's management hasn't stopped "financing Russian aggression," and that "key shareholder Daniel Kretinsky, is closely linked to the oil, gas and banking sectors of Russia's economy."

Kretinsky is a Czech oligarch who holds a 29.99% stake in METRO, and also owns EPH, a Czech holding company that reported record earnings in the first half of 2022 thanks to its large stake in the Russian gas business.

Metro CEO Steffen Greubel made statements defending the company's decision to stay in Russia as early as the spring of last year. Now, more than a year since Russian forces crossed the border into Ukraine, the company appears steadfast in its decision to continue doing business there.

In a written statement provided to DW, a company spokesperson said: "Metro condemns the Russian invasion of Ukraine."

They defended the company's decision to maintain operations in Russia saying, "We had decided after careful internal review to maintain the operations of the Russian subsidiary as the company also holds responsibility for the 10,000 colleagues there and many of our customers who source their food from us."

In the 2021/2022 fiscal year, Metro upped its sales in Russia to a total value of €2.9 billion ($3.9 billion).

More food companies on NACP list

As of March 16, Metro is joined by 16 other entities on NACP's international sponsors of war database which is monitored by the London Stock Exchange Group. Other consumer goods companies listed include US-based P&G (Proctor & Gamble) and France's Auchan.

Research from the University of St. Gallen in Switzerland found that less than 9% of EU and G7 companies with subsidiaries in Russia had left the country by November 2022. According to the study, the majority of the companies that remain have headquarters in Germany.

According to the NACP's website, Metro was singled out as a sponsor of war due to its continued partnership with Sberbank — which is majority owned by the Russian state — its development of a franchise project of chain grocery shops in Russia called Fasol, and its acceptance of Mir payments.

Metro locations in Turkey accept Mir payments, a card payment system set up by Russia's central bank which has been blocked in a number of countries after the US threatened to sanction entities that accept it last September.

Metro's spokesperson stated: "Since the beginning of the war, no investments in growth have been made in Russia aside from maintaining the existing business operations, and we continue to observe developments very closely."

Ukraine citizens offended by businesses' failure to act

Citing frustrations with the company's choice to continue business in Russia, Taras Korpaniuk shared a video of himself writing "blood money" in red spray paint across the door of a Metro outlet in Ukraine.

For this act of vandalism, he was fined by the local police and has since made amends with the manager of that Metro outlet.

Korpaniuk is a co-founder of "Port Frankivsk," a volunteer group named after a book about the city of Ivano-Frankivsk, Ukraine, which focuses on procuring supplies such as bulletproof vests and rifle scopes, and delivering them to strategic locations.

Asked why he was personally concerned with Metro's business in Russia, Korpaniuk told DW: "The war became a litmus test showing the inner workings of some companies." He added that he admired businesses that made the difficult decision to pull out of Russia last year even if that meant taking a loss in revenue.

"It's a powerful sign to the [Russian] people," he said, "because when they see companies leaving their market they understand that something is wrong. It makes life harder and gives an additional reason for them to start questioning the dictatorship."

A business with units on both sides of the front line

Metro's international business spans 34 countries, including Russia and Ukraine. Metro Cash & Carry has operated in Ukraine since 2003 and currently operates 23 wholesale centers there.

On Metro Ukraine's website, a statement about NACP's international sponsors of war list reads, "The decision of [NACP] concerns METRO Russia…We join the demands of the State regarding the closure of businesses in the aggressor country and will continue to put pressure on international partners on the corporate and diplomatic front…Metro Ukraine for Ukraine."

Metro's spokesperson reiterated the company's efforts to support aid programs in Ukraine, adding that "our top priority is to support our Ukrainian colleagues, maintain the store operations for food supply and help people in the country as well as refugees from Ukraine through concrete initiatives."

But for Metro employees in Ukraine, it may be hard to reckon the headquarter's statements of solidarity with the fact that the company continues to profit from business operations carried out in Russia.

A statement released by Metro Ukraine on social media stated that members of the Ukraine subsidiary have "repeatedly appealed" to the Metro headquarters in Dusseldorf, Germany, demanding the "immediate closure of business on the territory of the aggressor state."