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Beauty giant Avon under fire over Russia links

Source The Ghana Report

Beauty giant Avon has come under fire for maintaining links with Russia despite the ongoing war in Ukraine.

The BBC has discovered the firm is still recruiting new sales agents in the country and continuing production in a huge plant in the Moscow region.

Avon, which has its headquarters in the UK, started doing business in Russia 30 years ago.

The firm said that it provides “critical support” for women whose livelihoods depend on their business.

The 137-year-old company is best known for its door-to-door sales representatives who demonstrate the application of its cosmetics, perfumes and creams first-hand.

The company has, however, transformed in recent years with a renewed focus on physical shops and social media sales.

At the outbreak of the conflict in Ukraine, Avon announced it was stopping investment and suspending exports of its beauty items from Russia to other markets, including Ukraine.

Avon’s parent company, the Brazilian firm Natura & Co, previously emphasised it was only maintaining local operations to support its sales agents who are reliant on their business.

“We believe restricting their access to products would have an outsize impact on women and children there,” it said.

However, the BBC has found it is still possible to register as a new sales agent for the firm in Russia, with recruits offered prizes, cash bonuses and even holidays for hitting targets.

A welcome email offers new recruits the chance to start on an "Easy Start" sales programme
A welcome email offers new recruits the chance to start on an “Easy Start” sales programme

The website offers Russian citizens over the age of 18 access to “iconic, high-quality products” and describes the additional income they might be able to make, creating their “own life” as a beauty expert.

After registering online, the BBC received a welcome email with the chance to begin an “Easy Start” sales programme and contact details for a local co-ordinator.

In a YouTube video published on Avon Russia’s account celebrating the 30-year anniversary, senior managers describe awards ceremonies, training in social media management and how to improve sales, with trips abroad offered as rewards for its top sellers who are in its “Star Club”.

An Avon spokesperson said: “Avon Russia supports women in Russia through locally funded activities to support their social selling businesses.

“We see this as critical support for women whose livelihoods depend on their Avon business.”

‘No excuse’

Russia has been described as a key market for the beauty giant.

Steven Tian, part of a team of researchers at Yale University who track what companies have done in response to the Ukraine war, said the company should be “ashamed” for continuing to do business in Russia.

“There is no excuse for continuing to fund Putin’s war machine… and [there] has been more than enough time to allow for companies to exit in an orderly way,” he said.

Mark Dixon, founder of the Moral Rating Agency, which campaigns against firms doing business in Russia, accused Avon of “moral-washing” for continuing some operations in the country while its parent company Natura & Co expresses concern for “all people impacted by this unacceptable aggression” in Ukraine on its website.

Mr Dixon called for Ukraine to ban Avon from operating in the country and for the “army of Avon reps” and consumers “to take a stand”.

“How can [Avon] in good faith sell products for women and children from a company that supports the economy behind Putin’s invasion of Ukraine?” he asked.

The firm started its operations in Russia in the early 1990s, and has since enjoyed enormous success there.

According to Avon’s Russian website, it is the number one perfume brand in the country.

It opened its Naro-Fominsk plant in the Moscow area in 2004, where it produces more than 220 types of cosmetics and perfumes. More than 2.5 billion units have been manufactured there since its opening.

Avon told the BBC that the plant in Naro-Fominsk now exclusively serves the Russian market.

Around the beginning of the war in Ukraine, the company told the Interfax news agency it was looking into relocating production for Eastern European markets from Naro-Fominsk to Poland, and it appears to have fulfilled this pledge.

When a contact placed an order with Avon in Russia in late October last year, three of the four products they received had been produced in its Naro-Fominsk plant, with one made in Poland.

Avon products and promotional materials
Avon continues production for the Russian market in a huge plant in the Moscow region

A contact also placed an order with Avon Ukraine locally, in order to verify whether or not exports from Russia had indeed been suspended. Five items, previously known to be produced in the Naro-Fominsk factory near Moscow, were ordered and all of them were marked as being made in Poland.

Natura & Co has said in the past there is “no financial advantage” to the firm being in Russia.

In its latest update to investors, Natura & Co said in the three months to the end of November, Avon International’s sales fell by 11.8% to 1.73bn Brazilian reais (£276m) when compared with the same period the year before.

Natura & Co said in its 2022 annual report that Avon had been heavily impacted by the war in Ukraine and by a “planned decrease” in the number of sales representatives as it shifts to a new business model.

Avon, which moved its headquarters to the UK in 2016, recently announced that it is about to open physical stores in Britain for the first time.

The company was founded in the US in 1886 by David McConnell, who mixed scents himself in a small office in New York.

Natura & Co’s acquisition of Avon in 2020 was considered a landmark deal, creating the world’s fourth-largest group of cosmetics companies.

More recently, however, the Brazilian firm said it would sell beauty brand The Body Shop for £207m “to simplify and refocus its operations”.

Under Natura & Co’s ownership, the retailer redesigned its stores and introduced a refills service, but failed to turn around its finances.

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