Ukraine invasion: FMCG major Unilever to continue operations in Russia

Unilever, the company behind popular brands like Magnum & Cornetto ice cream, Dove soap, Sunsilk, and many other globally popular products has stated that it intends to continue operating in Russia despite the country's invasion of Ukraine over a year ago.

According to the St Petersburg International Business Association (SPIBA), Unilever owns four production clusters in Russia located in St Petersburg, Tula, Omsk, and Yekaterinburg. In 2017 the company celebrated the 25th anniversary of its work and presence in the Russian market.

The total investment of Unilever in the Russian economy exceeds 183 billion rubles ($2.03 billion).

While SPIBA states that Unilever employs around 5,000 people in Russia, In Unilever’s statement earlier this year, they stated that the number was around 3,000.

In a release by the company, Unilever stated that with all things considered, the company still believes that the best course of action would be to allow businesses to continue under “the strict constraints” that were placed in the previous year.

In March 2022, Unilever had ceased all imports and exports of products in Russia but continued supplying products that were made in the country. They also ceased capital flows in and out of the country and stopped all media & advertising expenditure.

“We understand why there are calls for Unilever to leave Russia. We also want to be clear that we are not trying to protect or manage our business in Russia. However, for companies like Unilever, which have a significant physical presence in the country, exiting is not straightforward,” read the official statement by the company in February.

This move was in line with many Western companies that had also suspended their operations in Russia following the invasion. These companies cited ethical concerns and the challenging business environment created by Western sanctions as reasons for their departure.

According to a report shared by Yale University, as of June 2023, more than 1,000 companies have curtailed their operations in Russia. The report added that this list included companies that ranged from complete removal to those who were doing “some degree beyond the bare minimum legally required by international sanctions.” The university has also started a school-style grading list from A-F for companies based on the actions they have taken in light of the Russia-Ukraine conflict.

Unilever has faced criticism from the Moral Rating Agency (MRA), with its founder Mark Dixon accusing the company of facilitating Russia's invasion. The MRA contends that Unilever's production facilities in Russia continue to manufacture and sell its original products despites its claims stated above.

Unilever has affirmed its commitment to the well-being of its Ukrainian employees and their families, providing support in finding safety in neighboring countries and offering accommodation in western Ukraine for those who choose to stay. Additionally, Unilever has donated over 15 million euros in support and essential products for humanitarian relief efforts.