By Charlotte Webster-
Nestlé has defended its decision to stay in Russia by saying it would not profit from its operations there.
The global company spoke as Ukraine stepped up the pressure on the world’s biggest food company to withdraw in the face of the intensifying war and rising casualties.
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Nestle has been facing a potential consumer boycott after the government in Kyiv claimed Europe’s most valuable company was complicit in the death of innocent civilians in Ukraine.
Anonymous, the online activist group, called for a boycott of Nestlé brands, labelling them “sponsors of tyranny”.
Nestlé for its part said that it had already “significantly scaled back” its activities in Russia by stopping all imports and exports, except for “essential products”, and ceasing investment and advertising.
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“We do not make a profit from our remaining activities,” the Vevey-based company said. “The fact that we, like other food companies, supply the population with important food does not mean that we simply continue as before.”
Nestlé, which owns brands including Gerber baby food, Nespresso coffee, and Perrier water, has more than 7,000 employees in Russia and earned about 2 per cent of its 2021 revenue of SFr87bn in the country. Six factories there are still operating and delivering product to retailers.
Ukrainian president Volodymyr Zelensky called out Swiss group Nestlé in a streamed speech to protesters in Switzerland’s capital of Bern on Saturday, pointing out the incongruity between its slogan “good food, good life” and it actions.
On Thursday, Prime Minister Denys Shmyhal contacted chief executive Mark Schneider to convince him to pull out of a market that accounts for just 2% of the Swiss food group’s global revenue, only to admit failure.
“Unfortunately he shows no understanding,” the head of government wrote in a post that received over 50,000 likes.
“Paying taxes to the budget of a terrorist country means killing defenseless children and mothers.”
Social Media Lead Boycott Of Nestle Goods
In response, social media quickly began circulating charts detailing which exact brands belong to Nestlé in order to inform consumers what products to avoid during their next trip to the grocery store.
In 2020, Nestle admitted following a leaked document, that a large percentage of its foods did not meet health standards. The document also admitted that “some of [Nestlé’s] categories and products will never be ‘healthy’ no matter how much we renovate”. Some of Nestle’s products are already the subject of further scrutiny by health experts.
Nestlé declined to comment on Shmyhal’s remarks, citing conversations with government authorities, while laying out the measures the company has taken thus far to limit its business dealings in Russia
Early on British energy group BP decided to divest its stake in Russian petroleum giant Rosneft, whose exports directly finance Putin’s military operations. Yet the moral imperative of exiting Russia becomes increasingly gray the closer a company comes to providing basic needs to the population at large.
“Business in Russia works even though our children die and our cities are destroyed,” he said, according to local media reports.
The comments are part of a broader campaign carried out by Zelensky and his government to lobby multinationals that are staying in Russia.
In a speech to the US Congress last week, Zelensky called for politicians to play their part in getting companies to stop financing the “Russian military machine”, naming a number of them including food companies Unilever and Mondelez International, European banks Raiffeisen and Société Générale, and pharmaceutical groups Bayer and Sanofi.
Nestlé for its part said that it had already “significantly scaled back” its activities in Russia by stopping all imports and exports, except for “essential products”, and ceasing investment and advertising.
“We do not make a profit from our remaining activities,” the Vevey-based company said. “The fact that we, like other food companies, supply the population with important food does not mean that we simply continue as before.”
Nestlé, which owns brands including Gerber baby food, Nespresso coffee, and Perrier water, has more than 7,000 employees in Russia and earned about 2 per cent of its 2021 revenue of SFr87bn in the country. Six factories there are still operating and delivering product to retailers.
An estimated 400 companies have pledged to scale back, suspend operations or withdraw completely from Russia, while some 80 or so have kept all or some of their operations, according to Jeffrey Sonnenfeld, a Yale School of Management professor who has been tracking the moves.
But consumer goods makers have been among the more reticent to pull out, arguing that they sell essential goods like food, beverages, shampoo, and baby formula and also have a responsibility to their often large Russian staff. For example, PepsiCo, Danone, L’Oréal, Carlsberg, and Anheuser-Busch InBev are all still manufacturing and selling in Russia.
Cigarette makers British American Tobacco and Imperial Brands have pledged to transfer their operations to local partners.
Anonymous, the online activist group, called for a boycott of Nestlé brands, labelling them “sponsors of tyranny”.
Ukrainian politicians have not hesitated to stoke the flames online. The foreign minister posted two photos that he suggested contrasted “Nestle’s positioning” with “Nestle’s position”: the first featured a child in front of some healthy food and the second showed a dead child in Ukraine.
After speaking to Nestlé chief executive Mark Schneider by phone last week, Ukrainian prime minister Denys Shmyhal tweeted that Schneider “shows no understanding” about the impact of staying in Russia.
“Hope that Nestlé will change its mind soon,” he said.
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