More companies pull back from Russia

Nestle, Philip Morris and Imperial Brands have joined the list of multinationals stepping back from Russia as pressure mounts from consumers in the West to take a stand against the invasion of Ukraine.

The world’s biggest packaged food group fell into line with rivals Procter & Gamble and Unilever in halting investment in Russia, while cigarette maker Philip Morris said it would scale down manufacturing and Imperial went further and suspended it.

The moves came after Coca-Cola and McDonald’s halted sales in Russia, where a senior member of the ruling party has warned that foreign firms which close down could see their operations nationalised.

McDonald’s said the temporary closure of its 847 stores in the country would cost it $US50 million ($A68 million) a month.

Sportswear firm Adidas also quantified the cost of scaling back its operations, saying it would take a hit to sales of up to 250 million euros ($A378,000,000).

PepsiCo and Starbucks have also joined the dozens of global companies closing stores, factories or exiting investments to comply with sanctions or due to supply disruptions.

Those supply hurdles include the world’s top three shipping giants suspending container routes.

Yum Brands, parent of fried chicken giant KFC, said it was pausing investments in Russia, a market that helped it achieve record development last year.

In response to the exodus, Andrei Turchak, secretary of the ruling United Russia party’s general council, warned that Moscow might nationalise idled foreign assets.

“United Russia proposes nationalising production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine,” Turchak wrote in a statement published on the party’s website on Monday evening.

The statement named Finnish privately owned food companies Fazer, Valio and Paulig as the latest to announce closures.

“We will take tough retaliatory measures, acting in accordance with the laws of war,” Turchak said.

Moscow, which calls its invasion of Ukraine a “special military operation”, has been hit by sweeping Western sanctions that have choked trade, led to the collapse of the rouble and further isolated the country.

Banks and billionaires have also been targeted, with the European Commission preparing new sanctions targeting additional Russian oligarchs and politicians and three Belarusian banks, Reuters reported.

Source link

Leave a Reply

Your email address will not be published.