Jessica DiNapoli
NEW YORK (Reuters) – Oreo cookie maker Mondelez this week brought in a new management team for its profitable Russian business, two internal memos seen by Reuters showed, adding to a new round of corporate reforms in Europe. details have been revealed.
After months of boycotts and pressure from shareholders and activists to leave Russia, Chicago-based Mondelez stopped advertising in the country, but was unable to completely leave Russia.
In one of the internal memos seen by Reuters, European President Vince Gruber told staff that he had appointed a new general manager to lead the Russian business, which Gruber described as an “independent organization.” .
However, in his new role, the Russian general manager will report to another executive who will report directly to Mr. Gruber, the memo said. The deal may not appease Mondelez's critics. The company has three factories in Russia, where it continues to sell products, including Milka chocolate, despite investor pressure and a boycott demanding its exit.
“The law uses the expression 'distinction without difference.' This is an attempt at a workaround that doesn't make much sense,” said Nell Minault, corporate governance expert and vice chairman of ValueEdge Advisors. Ta. “In certain types of business relationships, if it involves health or urgently needed supplies, there are things that can be considered justified. These are cookies, and there's really no excuse.”
“Effective at the end of 2023, we have set up a local company to operate more independently,” Mondelez said on Friday in response to questions from Reuters.
It added: “Products sold in Russia are currently produced and distributed locally, and there are no finished products imported from Europe to Russia or exported from Russia to Europe.”
McDonald's, Starbucks and many other global brands left Russia, writing off billions of dollars in assets following the 2022 invasion of neighboring Ukraine.
Mondelez's rivals, including Maggi maker Nestlé, continue to operate in Russia. Food products are not subject to international sanctions.
In its annual report released in February, the company said the war in Ukraine was a risk to its operations that could lead to loss of life, physical damage and destruction of property.
In its annual report, Mondelez said: “Despite our role as a food company and our public statements regarding Ukraine and Russia, we may face questions or negative scrutiny from stakeholders regarding our operations in Russia.'' There are,” he said.
Mondelēz said in a company statement last year that its operations in Russia provide “shelf-stable products that are everyday necessities of ordinary people,” and that the suspension of operations would “impair the supply of food to many families who have no voice.” This means cutting off part of the war. “
Mr. Gruber, the Mondelez executive, told employees in a memo on January 31 that the company would reorganize its European region into 14 “commercial units” responsible for smaller regions and individual countries. On February 13, another memo from Gruber informed staff that Alexei Blinov would be the new general manager of Russia. According to LinkedIn, Blinov is the finance director of Moscow-based Mondelēz.
Europe, where Mondelez's Milka and Cadbury chocolates are popular, is Mondelez's biggest market by sales, but the company is at odds with retailers there over price hikes.
In the wake of Russia's invasion of Ukraine, Mondelez said it was scaling back operations in Russia and focusing on “essential services” but was still facing internal pressure from employees to exit.
Last year, a corporate boycott of Mondelez erupted in Scandinavian countries after Ukrainian government agencies designated the company an “international war sponsor.”
Last June, Mondelez said it would make its Russian operations “independent with a self-sufficient supply chain by the end of the year,” without providing additional details.
In its annual report released earlier this month, the company said its Russian operations are more profitable than in the past.
Before the war, Mondelez executives in Moscow also controlled operations in Ukraine, according to people familiar with the structure. Sources said the company's Ukrainian operations were removed from Moscow's oversight following Russia's invasion of Ukraine in February 2022.
(Reporting by Jessica DiNapoli in New York; Editing by Matthew Lewis)
