Mondelez’s Russian Odyssey Under Fire as Chocolate Giant Stays Put
Since the Russia-Ukraine war, a number of companies have had to wind up their operations and relocate to other countries for their business. This was done voluntarily to mark their protest against Russia for invading Ukraine, or they had to do so under pressure from the compounding effects of the war on their businesses.
In fact, on March 16, 2022, the President of Ukraine, Volodymyr Zelensky, asked for help from the United States Congress to curtail the amount of business that the companies were doing in Russia. He appealed to the American people and decision-makers to stop buying the products of businesses that were allegedly continuing to sort of fund Russia’s war machine.
He had said,” “This confrontation is going on right now. And that is why right now we are calling on all businesses to come to Ukraine and leave the Russian market. “It is obvious that post-hostilities, reconstruction of Ukraine will give an extraordinary moral advantage to all businesses that will be in it,” he added. “And it is also obvious that every business that is now helping the Russian tyranny in any way will not be able to avoid problems and their reputation crisis.”
As per his statement, the companies doing business in Russia must leave the Russian market immediately since, as per him, that market was flooded with Ukrainian blood. Similar requests were made to the French and other countries, including the Ukrainians still doing business in Russia at that time. Zelensky asked them to not continue with their business there and, in a way, not sponsor the killings.
This had a widespread impact, as thousands of people and many business organizations started public campaigns against the companies that continued to run their businesses in Russia. Even to date, thousands of companies have pulled out of Russia, while others are still holding the fort. This is simply because they are trapped in there, due to business reasons and have invested heavily to come out of it suddenly in just a few month’s time.
This had a sizeable impact on the economy of Russia, and industries like auto, retail, fast food, and finance sectors were affected by this departure. The new investment was also halted in Russia, and many products and services that had become a part of Russian people’s lives were suddenly gone.
Mondelez International, an American snacking giant company that is famous for Milka, Cadbury, and Toblerone chocolates, has been in the midst of controversy for the last few weeks. Their operations still run in Russia without any halt, which has put them in the news of late for all the wrong reasons. They don’t seem to be serious about scaling back their operations in Russia, despite promising to do so by the end of 2023. In fact, the company still employs about 3,000 people from three factories, with the result supporting 10,000 farmers.
Instead of following through on its promise, Mondelez has simply rearranged its European leadership team to create the appearance of independence for its Russian unit. But this action didn’t cut any ice with the experts in the field. Their argument being that the company is still providing essential products in day-to-day life like the ‘cookies’, and this can’t be the justification for the company to stay in Russia.
Experts contend that this action is insubstantial, particularly given that Mondelez defends its position in Russia by offering “essential goods” like cookies, which many people view as illogical. When Dirk Van de Put, CEO of Mondelez, implied that investors aren’t worried about the company’s continued operations in Russia, it raised some eyebrows. This was criticised by the investors, and one of the investors even submitted a resolution against Mondelez.
In their request, the board was requested to investigate the alleged abuses of human rights by the company, specifically in Russia and Ukraine. Bennett Freeman, co-founder of B4Ukraine and former Senior Vice President of Calvert Investors, criticized Van de Put’s perspective as shortsighted, highlighting the risks associated with operating in Russia amid its involvement in various conflicts.
As per the US business advisory on Russia, “businesses and individuals operating in Russia or occupied territories are at risk of being implicated in Russia’s violations of international law and human rights abuses.” The implications of the war have already taken shape in the form of 127,000 war crimes that the Russians have been allegedly responsible for.
In the United Kingdom too, there has been opposition against Mondelez, with some members of Parliament condemning them. Ironically, Mondelez (spun off by Kraft Foods) acquired Cadbury in the United Kingdom in 2010.
Meanwhile, Mondelez employees and customers have expressed their concerns. Employees initiated petitions urging the company to take a clear stance against the conflict in Ukraine and suspend its business activities in Russia. A coalition called B4Ukraine surveyed Mondelez consumers, with many respondents urging the company to exit the Russian market to avoid complicity in Russia’s actions.
The company has faced criticism from every corner, including investors, employees, government servicemen, and even consumers. They have raised their apprehensions about the ethics of the company and questioned its corporate responsibility, which they were supposed to fulfill, especially in times of conflict.
