Food Manufacturers Lag Behind in Their Commitment to Halt Business in Russia
While the list of major western companies and brands that have suspended operations in the country is growing, there remain several companies in the Russian market that lag behind, seek loopholes, or take no action at all.
Combined, the US, EU, and the UK purchase more than $700 million worth of goods from the Russian Federation. As a consumer, you should stay informed about companies that do business in Russia because they help finance the war against Ukraine through paid taxes.
Of these omissions, the food and drink industry is prominent. Big names such as Burger King cite legal complications and convoluted franchise arrangements as being the main cause of their failure to completely pull out of Russia. Therefore, several notable Western companies continue to feed into the Russian economy.
Which Food and Beverage Companies Still Work in Russia?
PepsiCo — pulls out of Russia but continues to supply “daily essentials”
Second, only to Mexico, Russia is one of Pepsi’s largest international markets, where it employs around 20,000 staff and brought $3.4 billion in revenue for the company in 2021, approximately 4% of its total revenue of $79 billion.
On Tuesday, the food and beverage giant reported a notable increase in quarterly revenue, leading to the company upwardly revising its performance and growth forecasts from 6% to 8%.
In March, PepsiCo announced its intention to cease sales of its best-selling soft drinks, including Pepsi and 7Up, in Russia. Yet, the company clearly stated that it has no plans to halt sales of “essential” food products such as baby formula, baby food, and milk, citing humanitarian obligations.
Danone — investment halted but the manufacture of dairy products continues
The French company, Danone, is one of several large-scale companies that justify their continuing trade in humanitarian terms.
Danone, which earned approximately 5% of its revenues in Russia in 2021, stated that it had ceased imports, exports, and investments in the country and that it would no longer profit from its operations there.
However, the company announced it would continue to supply and manufacture infant nutrition products within Russia.
The position of Danone on its operations in Russia has not changed. We have no plans to stop our operations in Russia or exit the market.
Mondelez — scaling back some business operations while continuing with others
Mondelez, the owner of brands such as Oreo and Cadbury, has stated that it will be “scaling back all non-essential activities “ in Russia, but will continue operations there.
As a food company, we are scaling back all non-essential activities in Russia while helping maintain continuity of the food supply during the challenging times ahead.
Facing pressure from its European employees, the company announced that it will suspend advertisement of its popular Milka and Oreo products, with Batman Oreo cookies branded with the Film of the same name (which was recently pulled from general release in Russia) drawing the most attention. However, the products of both brands can still be seen on the shelves and on the corporate website.
Mondelez has anticipated an annual revenue increase to 4% in 2022, a step up from its previous estimate of 3%.
Nestle — responds to pressure from employees, but maintains a presence in Russia
In response to the Ukraine-Russia conflict, Nestle, the world’s largest food company, halted its advertising and capital investments in Russia Yet the company continued to sell some of its most popular products in the country, which led to pushing back from both its own employees and Ukraine officials. The company later stated that it will halt sales of its popular brands, including KitKat and Nesquik.
In March, Nestle announced that it would limit sales in Russia to baby formula and medical products.
YUM! Brands, Inc. — suspends operations of company-owned restaurants
The owner of the huge Pizza Hut and KFC brands announced that it had “ suspended all investment and restaurant development in Russia while we continue to assess additional options. Yum! will also redirect all profits from operations in Russia to humanitarian efforts. “
Yum Brands has temporarily shut down 70 KFCs throughout Russia. However, approximately 1000 franchisee-owned KFCs and 50 Pizza Hut franchises, many with close links to Russian investors, continue to trade.
What Do Consumers Think?
PissedConsumer.com conducted a poll among its users, the US consumers, to find out where they stand on companies that do business in Russia and how this would affect their purchasing decisions.
According to the poll, 79% of US consumers responded ‘no’ to the question of whether they support companies that continue to do business in Russia, while the other 21% said ‘yes’.
On the question of whether one would continue purchasing products from companies that continue to do business in Russia, 81.9% said no, they would not, whereas 18.1% stated that they would continue to do so.
When asked how they would be prepared to pay over the odds in order to lessen the influence of Russia over the US economy, 37.7% stated they would pay 11% more, and 36.2% said they would be ready to overpay 3%.
The survey results show that most US consumers do not want to buy from companies that remain in Russia and help support the war against Ukrainian civilians. Consumers join the movement to boycott such brands and stop purchasing from them.
What Is the BoycottRussiaBot?
To help consumers identify the brands, the PissedConsumer review platform puts a notice on dedicated company pages and a video review with a warning to companies. The review platform also partnered up with BoycottRussiaBot, a voluntary, Ukraine-based initiative that gathers up-to-date information on companies regarding their involvement in and with the Russian economy. Users simply enter the name of a company, and the bot will check it against its database to provide details on its current status in Russia.
Projects like PissedConsumer.com and BoycottRussiaBot aim at notifying and informing the consumer so that they can make qualified decisions when choosing how they spend their money.
Would you buy from a brand knowing that it supports the killing of innocent people? Please comment below.
Originally published at https://www.pissedconsumer.com on May 3, 2022.
