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Mondelez International Inc. is cutting back on its business operations in Russia, and this was announced by the company on Thursday, June 15. The snack food, beverage, and confectionery manufacturer further shared its plans to segregate its Russian business before the end of this year.
Reuters reported that Mondelez will turn its operations into a stand-alone business in the country. Once the process is completed, the company will have its own supply chain to become self-sufficient.
The move comes after corporate groups responded and joined in the calls for the boycott of the Oreo biscuit manufacturer. The reason for the move was Mondelez’s continued strong presence in Russia amid the ongoing war with Ukraine. The widening corporate boycott against the snack brand led to the removal of Mondelez products in establishments and retail outlets.
This week, the company issued a response to explain its side as to why it has not withdrawn from Russia yet, even if most of the major companies have already left. In its statements, it outlined some steps it would take to reduce its operations since it cannot pull out completely.
“There are no easy decisions, but, like most other global food and beverage companies, we are continuing to provide food during these challenging times, focusing our operations in Russia on affordable, shelf-stable products that are daily staples for ordinary people,” Mondelez International said in a statement. “If we suspended our full operations, we would risk turning over our full operations to another party who could use the full proceeds for their own interests.”
The company added, “This would mean cutting off part of the food supply for many families who have no say in the war. It would also create great uncertainty for our 3,000 colleagues and more than 10,000 farmers who depend on us.”
Since the company cannot leave Russia, it will just reduce its activities and give up new capital investments. It will also cancel new product launches and cut ad media spending in the country.
Finally, Mondelez further explained that these adjustments would result in a huge decrease in the number of products to be sold. It also confirmed that its sales are now falling in the region.
Photo by: Mondelez International Newsroom
