NEW YORK, June 16 (Reuters) – Mondelez Worldwide’s (MDLZ.O) Europe president stated Thursday that the Milka chocolate bar-maker was being “singled out and handled in another way” from rival corporations which are additionally persevering with to promote meals and drinks in Russia, in accordance with a memo seen by Reuters.
Within the memo titled “A observe on Nordics/Russia” despatched to workers Thursday, Vinzenz Gruber wrote in regards to the boycotts initiated in opposition to Mondelez by Scandinavian corporations over its resolution to stay in Russia the place it’s legally permitted to function. He described the stress within the Nordics as “difficult,” and that he was “deeply saddened by what’s occurring” to its manufacturers there. Marabou is widespread in Sweden, and Freia is Norwegian.
“It’s laborious for all of us to see our firm singled out and handled in another way from different friends regardless of the realities of the state of affairs,” Gruber stated within the memo, which was distributed internally at Mondelez. “If you happen to look in most kitchen cabinets, you will notice many merchandise from meals and beverage corporations that haven’t exited Russia.” Gruber did not check with any particular manufacturers.
“If there have been boycotts on all manufacturers which have father or mother corporations with exercise in Russia, there can be a meals provide concern,” Gruber stated, with out specifying any manufacturers.
The boycotts, initiated by corporations together with airline SAS, started final week in Sweden and Norway. The backlash stemmed from Ukraine’s Nationwide Company for the Prevention of Corruption naming Mondelez an “worldwide sponsor of conflict” final month for persevering with to promote its items in Russia. Mondelez didn’t touch upon the designation.
It isn’t completely unusual for corporations to boycott one other firm. For instance, a whole bunch stopped promoting on Fb, now Meta, in 2020 after U.S. civil rights teams enlisted multinationals to stress the corporate into taking concrete steps to dam hate speech.
After boycotts of Mondelez’s Freia and Marabou chocolate manufacturers within the Nordic area this week the corporate stated on Thursday that it was working to make its enterprise in Russia stand-alone with a “self-sufficient provide chain” earlier than the top of the 12 months. The corporate didn’t provide particulars on its plans for Russia. Meals doesn’t fall below any worldwide sanctions.
As Putin’s conflict enters its second 12 months, corporations that proceed to function in Russia after its invasion of Ukraine have drawn criticism from human rights teams, prospects, workers and buyers, in accordance with quite a few media accounts.
A consultant on the Russian Embassy in Washington, D.C. didn’t instantly reply to a request for remark.
Mondelez didn’t instantly reply to requests for touch upon the memo.
Mondelez rivals in chocolate together with Nestle (NESN.S) nonetheless function in Russia as do many different shopper merchandise corporations. Nestle stated in its newest annual report that it had six factories in Russia together with confectionary. Nestle did not reply to requests for remark.
Mondelez pledged March 9, after the invasion, it was “scaling again” non-essential actions within the nation and specializing in “primary choices.” On Thursday, Mondelez stated it has “scaled down our actions, discontinuing new capital funding, new product launches and our promoting media spending in Russia.”
But it surely has continued enterprise in Russia and boosted shipments of a few of its merchandise to the nation, customs information protecting from January 1, 2021 by way of March 31, 2023 reveals.
Shipments to Russia of merchandise with descriptions that particularly point out Milka chocolate bars rose 131% to 22.4 million kilograms within the 12 months after the conflict, beginning in April 2022 by way of the top of March, from 9.7 million kilograms within the prior 12 months, in accordance with information Reuters obtained from a industrial supplier of customs information.
Shipments of all Mondelez merchandise to Russia jumped to 45 million kilograms from 28.7 million kilograms in the identical time intervals, in accordance with the info.
A Mondelez spokeswoman, contacted a number of instances, didn’t touch upon the customs information.
In an announcement, Mondelez stated that since January, the corporate’s total volumes in Russia have “declined double digits,” and each its import volumes and market share have considerably decreased.
The corporate didn’t present additional particulars on the figures. It additionally stated it doesn’t disclose country-level gross sales, import and export information.
Mondelez additionally stated Thursday it was persevering with to cut back its actions in Russia and expects additional quantity and gross sales declines.
To this point, Mondelez’s Russian enterprise has been extra worthwhile in current months than up to now as a result of the corporate suspended promoting within the nation, a value financial savings, and elevated costs, in accordance with an April submitting with the U.S. Securities and Trade Fee (SEC) protecting the primary three months of 2023. Foreign money adjustments additionally helped the enterprise, the quarterly SEC submitting reveals.
Jan Kæraa Rasmussen, head of environmental, social and governance (ESG) and sustainability at Mondelez investor PensionDanmark, stated the Danish pension fund considers the “downscaling of their enterprise in Russia a development.
“We see potential for additional steps from the corporate,” Rasmussen stated. “We’re skeptical in regards to the want for many corporations to be current in Russia and encourage them to rethink their operations within the nation.”
Reporting by Jessica DiNapoli in New York; Further reporting by Maurice Tamman and Terje Solsvik; Modifying by Anna Driver
Our Requirements: The Thomson Reuters Belief Rules.