Nestlé to keep selling essential food items in Russia despite Ukrainian PM intervention

By Oliver Morrison contact

- Last updated on GMT

Image: Getty/MicroStockHub
Image: Getty/MicroStockHub

Related tags: Nestlé, Russia, Ukraine

Nestlé is refusing to yield to pressure to pull out of Russia after Ukraine’s prime minister urged the food giant to halt all business in the country.

Foreign companies operating in Russia claim they have moral responsibility​ to keep providing ordinary citizens access to nutrition.

But Prime Minister Denys Shmyhal revealed in a tweet that he spoke with Nestle CEO Mark Schneider about the ‘side effects’ of staying in the Russian market. “Unfortunately, he shows no understanding,” ​Shmyhal complained. “Paying taxes to the budget of a terrorist country means killing defenseless children&mothers [sic]. Hope that Nestle will change its mind soon.”

In response, Nestlé told FoodNavigator: “We consider conversations with governmental authorities private,” ​adding, “In Russia, we continue to focus on meeting the needs of the local people.”

Nestlé typically earns EUR1.6 billion of sales from Russia. It has stripped down much of its Russian operations to basic necessities and says it doesn’t make a profit from its remaining activities in the country. 

These measures include halting all advertising activities and capital investment in the country and suspending exports of products out of Russia (except for essential foods, like baby food) to Commonwealth or Independent States countries.

It has also suspended imports of products into Russia (one example being Nespresso) except for essential foods such as baby food, cereals, and tailored nutrition and therapeutic pet foods for specialist retailers and veterinarian clinics.

“As a food company and employer, we recognize that we also have a responsibility toward our more than 7,000 employees in Russia — most of whom are locals,”​ the spokesperson added.

‘We have a responsibility to the people we feed’

Similarly, Unilever has suspended all imports and exports of its products into and out of Russia and will stop all media and advertising spend. “Nor will we profit from our presence in Russia,”​ said CEO Alan Jope. The company will continue to supply everyday essential food products such as milk, baby formula and baby food made in Russia to people in the country.

Danone, too, has suspended investments in Russia, where it generates around 6% or EUR1.4 billion in sales and employs around 8,000 staff, but will continue selling dairy and baby food in the country via the popular local brand Prostokvashino.

Chief Executive Antoine de Saint-Affrique told the Financial Times​ it was "very easy to get drawn into black-and-white thinking and demagogic positions, but in the end our reputation is about our behaviour".

"We have a responsibility to the people we feed, the farmers who provide us with milk, and the tens of thousands of people who depend on us.”

 

Related topics: Markets, Manufacturers

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