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22 Feb, 2024 14:48

‘Investors don’t morally care’ – CEO explains why Oreo’s remain in Russia

The shareholders of Mondelez International have never pressured the company to quit the market, Dirk Van de Put has said  
‘Investors don’t morally care’ – CEO explains why Oreo’s remain in Russia

The shareholders of Mondelez International, one of the world’s biggest snack companies, do not “morally care” whether the firm continues to do business in Russia, the company’s CEO Dirk Van de Put told the Financial Times on Thursday.    

Mondelez, the maker of Milka and Alpen Gold chocolate, OREO and Barni biscuits, Picnic bars and Dirol chewing gum have not been pressured by shareholders to leave the country, according to Van de Put. The company’s shareholders include Vanguard, BlackRock and Capital Group.

Headquartered in Chicago, Mondelez is among the largest foreign companies still operating in Russia and is the Russian market leader in sales of chocolate, sweets, and biscuits, and is also ranked second in the chewing gum and lollipops categories.  

“I don’t think [investors] morally care,” Van de Put said. “If you have an important Russian business, the hit on the company would be huge, and that becomes a different discussion,” he added.  

Mondelez has three large production facilities in the country that employ some 3,200 people. Its Russian business contributed 2.8% of the firm’s global revenues in 2023, down from 4% in 2022.   

Although some funds in the EU “asked some questions” about Mondelez’s operations in Russia “there has been no shareholder pressure whatsoever” and no request to leave Russia from any of the company’s investors, Van de Put said.  

According to the FT, such comments reflect a change in the way Western consumer-oriented companies view their business activities in Russia. Scores of international companies announced their withdrawal from the Russian market under pressure from Ukraine-related sanctions, but in reality few have exited the country entirely.  

Last year, Ukraine’s anti-corruption agency designated Mondelez International a “sponsor of war” due to its reluctance to exit Russia, claiming that the firm’s subsidiary paid more than $61 million in taxes to the Russian budget.

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