Mondelez put new management in place at its profitable Russian business this week, internal memos seen by Reuters show.
The Oreo cookie-maker made the change following months of boycotts and pressure from shareholders and activists for the brand to leave Russia.
The company has stopped advertising in the country, but has failed to withdraw operations from Russia entirely.
In one of the memos, Europe president Vince Gruber informed staff that it appointed a new general manager to lead its Russian business, which Gruber described as a “standalone organisation”.
According to the memo, the Russian general manager – Alexey Blinov – will report to another executive who will report to Gruber.
The company has three Russian factories and has continued to sell its products in the territory despite investor pressures and boycotts calling for it to leave.
‘These Are Cookies’
Nell Minow, a corporate governance expert and vice chair of ValueEdge Advisors said, “In the law we use the expression 'a distinction without a difference.' This is an attempted workaround that is not very meaningful.
“There are certain kinds of business connections where you see a justification, if it has to do with health, urgently needed supplies.
“These are cookies and there really is no excuse.”
In response to questions from Reuters, Mondelez said on Friday, that “effective at year-end 2023, we have stood up our local business to operate more independently."
Mondelez said last June it would make its Russian operations "stand-alone with a self-sufficient supply chain before the end of the year" but did not provide additional details.
Following Russia's invasion of Ukraine, Mondelez said it was scaling back its business in Russia and focusing on "basic offerings," but still faced internal pressure from employees to exit.
‘Negative Scrutiny’
Many global brands including McDonald’s and Starbucks withdrew from Russia following its invasion of Ukraine in 2022, writing off billions in assets.
Mondelez rivals including Nestlé have continued to operate in Russia. Food does not fall under any international sanctions.
The company said in its annual report that the war in Ukraine is a risk to its business that could lead to loss of life and physical damage, as well as destruction of its property.
The report also said the company may face questions or “negative scrutiny” from stakeholders about their place in the country.
In a statement last year, Mondelez said its business in Russia provides “shelf-stable products that are daily staples for ordinary people,” and that suspending operations “would mean cutting off part of the food supply for many families who have no say in the war.”
Europe, where Mondelez's Milka and Cadbury chocolate is popular, is the company's biggest market by sales, but it has been at odds with retailers there over price hikes.
A corporate boycott of Mondelez broke out in the Nordic countries last year after a Ukrainian agency named the company an "international sponsor of war."
Its Russia business is more profitable than it has been historically, the company said in its annual report released earlier this month.
Before the war, Mondelez executives in Moscow also managed its operations in Ukraine, a source familiar with the structure said.
Its Ukraine business was removed from Moscow supervision following Russia's February 2022 invasion of Ukraine, the source said.
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