MOSCOW — Mondelez International, Inc. plans to have its business in Russia operating as a stand-alone company with a self-sufficient supply chain before the end of the year.
The company has been scaling down its activities, discontinuing new capital investments and new product launches, and reducing advertising spending in Russia. As a result, Mondelez said it is selling significantly fewer products and sales are declining in Russia.
“This year, our overall volumes have declined double digits and both our import volumes and market share have significantly decreased,” the company said. “We’re continuing to reduce our activities and expect further volume and sales declines as we work to make our Russia operations self-sufficient.”
One of the company’s fears, Mondelez said, was that if it suspended full operations it would risk turning over its full operations to another entity that may use the proceeds for their own interests.
“It would mean cutting off part of the food supply for many families who have no say in the war,” Mondelez said. “It would also create great uncertainty for our (approximately) 3,000 colleagues and more than 10,000 farmers who depend on us.”
Mondelez has condemned the aggression against Ukraine and has committed $15 million via the Mondelez International Foundation to support the country, Ukrainian citizens as well as refugees, with cash and in-kind contributions. But Mondelez also has faced backlash over the past month due to its continued presence in Russia, and several companies in the Nordic region recently announced plans to stop selling Mondelez products.
Commenting on the backlash, Vinzenz Gruber, president of the company’s European operations, in a June 15 memo sent to employees and obtained by Reuters, said Mondelez was being “singled out and treated differently from other peers despite the realities of the situation.”
“If you look in most kitchen cupboards, you will see many products from food and beverage companies that have not exited Russia,” Mr. Gruber said, without mentioning any specific brands.
Mondelez has a subsidiary and three facilities in Russia.