February 4, 2023

Nestle suspends the "vast majority" of its sales in Russia

Nestle suspends the “vast majority” of its sales in Russia

LONDON (Reuters) – Nestle will stop selling a wide range of brands in Russia, including Kit Kat and Nesquik chocolate bars, amid criticism from Ukrainian President Volodymyr Zelensky of the world’s largest food company for its continued presence in the country.

A Nestle spokesperson said the affected products, including pet food and coffee, made up the “vast majority of volume and sales” in Russia, which amounted to 1.7 billion Swiss francs ($1.82 billion) in 2021.

The Swiss company had already halted non-essential imports and exports to Russia and also halted all advertising and capital investment in the country and said it would donate profits from Russia to Ukraine’s relief efforts.

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Western companies with a presence in Russia are trying to provide basic food and medicine while also facing pressure to cut all ties with Moscow. Read more

More than 400 companies have pulled out of Russia since it invaded Ukraine on February 24, leaving behind assets totaling hundreds of billions of dollars.

Zelensky said Nestlé has not done enough to live up to its motto of “good food, good life” by continuing to operate in Russia.

Russian President Vladimir Putin sent his troops to Ukraine in what he called a “special military operation” to disarm and “disarm” the country. Ukraine and the West say Putin launched an unjustified war of aggression.

Nestle, PepsiCo, Unilever (ULVR.L) and Procter & Gamble (PG.N)continues to provide essential items for nutrition and hygiene in Russia, such as milk and diapers.

French competitor Danone (DANO.PA) On Wednesday, it said it would continue domestic production in Russia of basic dairy and infant nutrition products.

Danone said it has halted all other imports and exports – including Evian Water – and halted all investments, including advertising, brand promotion and consumer promotion in Russia. The company also said it received no cash, dividends or dividends from its Russia business. Read more

On Wednesday, Zelensky told French lawmakers that French companies should leave the Russian market. Read more

Nestlé said it would continue to pay about 7,000 employees in Russia, where it has six factories that make products including ready meals, drinks and pet food.

Nestlé also said it stands with the people of Ukraine and its 5,800 employees in the country.

Nestlé has in the past been criticized by activist groups and governments over issues including the manufacture of bottled water, the decision to remain in South Africa during apartheid, and the marketing of infant formula.

Ahead of Wednesday’s action, Ukrainian politicians denounced Nestle as well as the activist group “Anonymous”, which also urged a boycott of the product.

“There is a history of protesting against Nestlé,” Jadeep Prabhu, professor of marketing at Cambridge University’s Judge Business School, told Reuters.

“Nestlé is much more front and center than Procter & Gamble (PG.N) and unilever (ULVR.L) When it comes to people who know they’re making their products, he said, Nestlé’s logos are very prominent in their products.

Nestle shares closed down 1.6%.

(1 dollar = 0.9346 Swiss francs)

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Additional reporting by Richa Naidoo in London. Editing by Jason Neely, Bernadette Baum and Jane Merriman

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