LRT: German duty-free operator continues luxury goods supply to Russia

Gebr. Heinemann, running shops in Lithuanian airports, continues supplies to Russia through companies controlled by Russian oligarchs, while claiming compliance with EU sanctions.

Dec 13, 2024 - 13:00

LRT: German duty-free operator continues luxury goods supply to Russia

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German duty-free operator Gebr. Heinemann continues supplying luxury goods to Russia while running duty-free shops in Lithuanian airports, an investigation by Lithuanian public broadcaster LRT reveals. In the past, the company partnered with Russian oligarchs later halting cooperation but continuing supplies to Russia despite promises to divest from Russia in the wake of the Moscow’s full-scale invasion of Ukraine.

International sanctions against Russia aim to cripple its war machine by cutting funds used to finance its ongoing all-out war in Ukraine. The sanctions target Russia’s energy, finance, and defense sectors, restricting access to markets and technologies to weaken its economy and military capacity, aiming to pressure an end to its aggression. Some European companies still operate in Russia.

The German retailer supplied luxury brands including Yves Saint Laurent, Chanel, Hugo Boss, Prada, Hermes, and Swarovski to Russian duty-free shops. While EU sanctions prohibit luxury goods exports exceeding €300 to Russia, the company’s declared wholesale prices remain below this threshold.

According to Russian customs data obtained by LRT, German concern Gebr. Heinemann shipped luxury goods worth €9.5 million to Russia in 2024. The company exported products valued at €35 million in 2023 and €4.5 million between March and December 2022.

The investigation found that despite announcing its withdrawal from Russian operations following the full-scale invasion of Ukraine in 2022, the company maintained business ties with companies controlled by Russian oligarchs until April 2023. It further continued supplies to Russia, with the company’s latest known shipments to Russian dated June 2024. Most of the goods go to Russia via Latvia, as per LRT.

LRT reports it has data showing that as recently as last year, alongside duty-free shops in Lithuania and other countries, Germans also operated a chain of such shops in Russia in partnership with Russian oligarch companies. The company later sold those shops, but continues to restock them to this day.

Responding to LRT’s inquiry, Gebr. Heinemann representatives stated they are “fulfilling existing contractual obligations in wholesale trade while fully complying with all sanctions.” The company declined to specify when these obligations would end.

LRT’s investigation revealed the company’s business connections to Putin allies, including sanctioned oligarch Arkady Rotenberg and Araz Mehdiyev, son-in-law of Putin’s former classmate.

Lithuanian Airports’ commercial director Gintarė Norvilaitė-Tautevičė told LRT they were aware of Gebr. Heinemann’s Russian connections but saw no grounds for security concerns. The company’s Lithuanian subsidiary, Travel Retail Vilnius, has operated in the country since 2007.

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