Cornetto maker 'Unilever' upholds its decision to 'Stay in Russia'

Unilever, the United Kingdom based conglomerate responsible for being the world's biggest ice cream manufacturer has made a statement to defend its stance on continuing its operation in Russia. This statement comes after more than a year of the Russia-Ukraine war. In their defence, Unilever stated that exiting was "not straightforward" as their operations would be taken over by the Russian state if it abandoned them. This concern has been raised by a campaign group which has estimated that the firm has contributed £579m to the Russian economy annually, reported a UK media outlet. 

Unilever continues to stay in Russia but why?

The Moral Rating Agency has blamed that Unilever has been facilitating Russia's invasion of Ukraine. "Unilever must stop hiding behind its balance sheet and excuses to face the reality that selling an ice cream can allow Putin to pay for a bullet," said founder Mark Dixon. 

According to local media reports, western companies from Apple to Levi's left Russia in the wake of its illegal invasion of Ukraine last year. The reason behind this move by the giants was ethical reasons and because sanctions have made it difficult to operate in the country.  

However, Unilever has continued and has been selling products in the UK such as Marmite and PG Tips. Although, exports and imports to and from Russia have ceased and advertising has been stopped. The company has claimed that it has been selling only "essential" products in the country, including everyday food and hygiene products."

However, some firms are still doing business there such as US consumer goods giant Procter & Gamble, which has said it has limited its activities in the country. Moral Rating Agency (MRA) has argued that Unilever's production facilities in Russia continued to manufacture and sell most of its original goods in the country.

Further, the agency has claimed that "its calculations accounted for the total amount Unilever paid into the Russian treasury annually, along with the money spent on local suppliers, employees and for other costs such as rent and technology. "The MRA calculation starts with Unilever's admission in its 2022 Annual Report that its Russian business represents 1.4% of turnover," the MRA added.

Unilever condemns Russia but continues to work 

Taking to Twitter, in March 2022, the company wrote, "Read our full statement on the war in Ukraine." With that tweet, they had attached a glimpse of that statement and shared a link to the same. "We understand why there are calls for Unilever to leave Russia," read the statement.

Further, they added " 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." In that statement, released immediately after the Russian invasion, they justified and wrote in the statement that if it were to abandon its brands in Russia, "they would be appropriated - and then operated - by the Russian state".

There were no "desirable" options, but continuing to run the business with "strict constraints" was the best way forward in the circumstances, read the statement by Unilever.