Unilever has come under renewed pressure to withdraw from Russia after its latest results revealed surging sales of non-essential products.
Campaigners are urging the consumer goods giant to end the sale of items like ice cream in Russia, which they claim are helping to fund Putin’s regime.
Unilever’s ice cream sales were up by 9% in 2022 compared with the year before, according to its latest earnings report.
These include sales in Russia, where the company still produces the likes of Magnum and Cornetto, despite previous pledges to restrict sales to “everyday essential food and hygiene products” such as infant formula.
Many other multinational companies, such as Nestlé and PepsiCo, now only sell essential goods.
“A Cornetto ice cream seems innocuous until you realise that millions of them being sold each day can quickly pay for the launch of a missile,” said Mark Dixon, founder of the Moral Rating Agency, which monitors western companies still doing business in Russia.
Unilever’s Russia business contributed 1.4% of the group’s total turnover in 2022 (€60.1bn) and 2% of the group’s net profit (€8.3bn), the latest accounts showed.
However, CEO Alan Jope said volumes in the Russian business were “down significantly by double digits” since it suspended all imports and exports of its products into and out of Russia in March last year.
The Dove maker promised to “draw an economic ring” around its business in Russia, halting trade, stopping all media and advertising spend, and ceasing all capital flows into and out of the country.
Jope defended once again the company’s decision to keep some of its Russian operations, pointing to the more than 3,000 people it employed across all four factories in the country.
“We understand that there are calls for us to leave, but for companies like Unilever that have a physical presence in the country, exiting is not straightforward,” he told members of the press on Thursday (9 February).
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Jope said it was faced with “three difficult options” by the Russian government, including writing down its assets there or selling the business altogether.
“The Russian government has written to businesses saying these are the three options you have – they’re difficult and none are very good.
“The first option would be to simply close our business. We don’t strive to abandon our 3,000 people in Russia and it’s also crystal clear that were we to do so, those assets and our brands would be appropriated by the Russian state and we do not believe that transferring our business to Putin’s regime is a better solution than us managing it with the restrictions that we put in place.
“The second option would be to sell our business, and to date we’ve not been able to find a solution that safeguards our people and avoids the Russian state gaining further benefits.
“And the third option is to allow the business to run with the strict constraints that we’ve put in place since March until now.”
Jope insisted Unilever was “not trying to protect the commercial value of our business in Russia”.
Despite efforts to maintain limited operations there, the company warned there was a “risk that the operations in Russia are unable to continue” if the impacts of the conflict became too great.
Unilever reported €42m of asset write-downs relating to its businesses in Russia and Ukraine last year. The fmcg behemoth held an asset position of around €900m in Russia as of 31 December 2022.
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