- Unilever’s Defense: Challenges of Exiting Russian Operations Amid Government Takeover Threat
- Economic Impact: Unilever Contributes $579 Million Annually to Russian Economy
- Ethical Controversy: Moral Rating Agency Accuses Unilever of Enabling Russian Invasion
More than a year after Russia invades Ukraine, the manufacturer of Dove detergent and Cornetto ice cream has defended its decision to continue operations there.
Unilever stated that exiting was “not straightforward” because the Russian government would take over its operations if it left.
It follows a campaign group’s estimation that the company annually contributes $579 million to the Russian economy.
The Moral Rating Agency accused the company of aiding the invasion of Russia.
“Unilever must stop hiding behind its balance sheet and excuses and face the reality that the sale of ice cream can enable Putin to purchase a bullet,” said the company’s founder, Mark Dixon.
In response to Russia’s illicit invasion of Ukraine in 2014, several Western companies, including Apple and Levi’s, withdrew from the country for both ethical and business reasons.
However, some businesses continue to operate in the country, including the American consumer goods behemoth Procter & Gamble, which has limited its operations there.
Unilever, which sells Marmite and Ben & Jerry’s ice cream in the United Kingdom, has ceased exports and imports to and from Russia and advertising in the country.
It also claims to sell only “essential” products in the country, such as food and hygiene items used daily.
However, according to the Moral Rating Agency (MRA), Unilever’s Russian production facilities continue to manufacture and distribute the majority of their original products in the country.
It stated that its calculations accounted for the total amount Unilever paid into the Russian treasury each year, as well as money spent on local suppliers, employees, rent, and technology.
“The MRA calculation begins with Unilever’s admission in its 2022 Annual Report that its Russian business accounts for 1.4% of revenue,” the organization explained.
“Contrary to expectations”
“We understand why there are calls for Unilever to leave Russia,” said Unilever.
“We also wish to clarify that we are not attempting to safeguard or manage our business interests in Russia. However, for corporations such as Unilever that have a substantial physical presence in the country, leaving is not simple.”
The company, which employs approximately 3,000 people in Russia, stated that if it abandoned its brands there, “they would be appropriated – and then operated – by the Russian government.”
The consumer goods giant stated that it was unable to find a way to sell the business that “prevents the Russian government from gaining additional benefit and protects our people.”
It stated that there were no “desirable” alternatives, but that continuing to operate the business under “strict constraints” was the best course of action under the circumstances.
This week, Shell was criticized for continuing to trade in Russian gas after pledging to leave the Russian energy market more than a year ago.
According to the oil giant, the trades resulted from “long-term contractual commitments” and do not contravene any laws or sanctions.
