5.09.2024 – Translated from Ukrainian via Google and OFP

British food and household chemicals giant Unilever has decided to leave Russia due to pressure from the public and international organizations, despite significant revenues in this market. Without Unilever, brands such as Dove, Hellmann’s, Lux, Magnum, Domestos will disappear from Russia.

Russian media write about this. Unilever has been operating in the Russian market since 1991 and has become one of the leaders among foreign companies, receiving a significant portion of its income in the country.

In Russia, the company owned four large production sites, and its brands such as Domestos, Dove, Rexona, Axe and Magnum ice cream became familiar to the Russian consumer. Unilever’s annual revenue in Russia was estimated at 62 billion rubles, which is no more than 1% of the company’s total revenue.

Following Russia’s invasion of Ukraine in 2022, Unilever announced it would suspend shipments of its products to Russia and exports from its territory. The company also stopped investing in the Russian market. However, despite these measures, international companies that remained operating in Russia paid about $1.8 billion in income taxes, funding the Russian budget, which is partly used to wage war against Ukraine, according to the KSE Institute.

Unilever was forced to value its Russian assets at a discount of 35-40 billion rubles, which is about half of their preliminary mark of 600 million euros. The company’s assets include well-known brands such as Chistaya Liniya (cosmetics), Domestos and Sif (household chemicals). Although a buyer has already been found, his name has not yet been disclosed, but it is obvious that the market is in the process of large foreign players leaving the Russian economy.

Unilever resisted leaving the Russian market for a long time. The company argued that its brands could be appropriated by the Russian state if it left the market. However, constant public pressure forced Unilever to reconsider its decisions. In July 2023, NAPC added Unilever to the list of international sponsors of war, which created serious reputational risks for the company at the global level.

Unilever explained its decision to remain in the Russian market by saying that 
exiting was not easy due to its significant physical presence in the country. However, after the company’s inclusion on the “War and Sanctions” list was announced, the public called for a boycott of the company’s products. This forced Unilever to eventually leave the market, although the company still complied with Russian law, including the possible conscription of its workers into the army.

Despite sanctions and a halt in investments, Unilever continued to make a profit in Russia. According to NAPC, the company’s profit in 2022 doubled compared to 2021: from 4.8 billion rubles to 9.2 billion rubles. This became one of the reasons for criticism of the company, because even in the midst of the war, it continued 
to financially support the Russian budget.

As OBOZ.UA reported earlier, some Western companies, such as Avon, Air Liquide and Reckitt, despite their initial plans, decided to remain on the Russian market due to difficulties with selling their businesses and strategic considerations. More than 2,100 transnational corporations remain in Russia, while approximately 1,600 international companies have left the market or curtailed their operations.

https://www.obozrevatel.com/ekonomika-glavnaya/economy/mirovoj-proizvoditel-unilever-nakonets-to-vyihodit-s-ryinka-rf-bez-kakih-brendov-ostanutsya-rossiyane.htm