B4Ukraine calls on the Board of Mondelez International — owners of the iconic American biscuit brand Oreo — to do the right thing and exit Russia.
Headquartered in Chicago, USA, Mondelez is among the largest foreign companies still operating in Russia. The US company is the Russian market leader in chocolate, sweets, and biscuits and is also ranked second in the chewing gum and lollipops categories. The company has three factories in the country employing some 3,200 Russians. In 2020, the company’s annual revenue in Russia hit $1.3bn, with Mondelez alleged to have paid about $170m in taxes in the Russian Federation, according to the KSE Institute. With that amount of money, the Kremlin could have obtained 26 Kalibr cruise missiles that have been used to terrorize Ukrainian civilians. This could make the snacking giant indirectly involved in financing Russian aggression since corporate taxes are currently estimated to make up approximately 10% of Russia’s GDP — enough to fund 50% of Russia’s military budget. As a major employer in Russia, Mondelez is also obliged under Russian law to help conscript its staff and provide resources to the Russian military if required.
“Mondelez CEO claims the company is ‘committed to protecting the planet and respecting the human rights of people in our value chain.’ Yet Russia’s unlawful invasion of Ukraine and legislative actions to compel companies to support the war effort present a potentially insurmountable challenge to Mondelez meeting its responsibilities to respect both human rights and Russian law. In light of Russia’s extensive violations of international law and companies’ potential exposure to these crimes through participation in the partial mobilization order, the current Russian market represents one of the most perilous human rights & material risk environments for international companies. Continuing to ’ sell chocolate and biscuits’ under the guise of ‘essential goods’ still poses risk to both people and profits,” said Richard Stazinski, Co-Founder and Executive Director of Heartland Initiative.
Despite the risk of complicity in the war, Mondelez has defended itself by arguing that it is providing essential food to Russians. In March 2022, Mondelez CEO Dirk Van De Put declared the company would be “scaling back all non-essential activities in Russia while helping maintain continuity of the food supply during the challenging times ahead.” However, the term essential is generally understood as food required to sustain health or life, and one can hardly argue that chewing gum or coffee fulfil that criteria. Russian media reported in May that the company was still selling chocolates, biscuits, and chewing gum in Russia (Alpen Gold, Picnic, Milka, Toblerone). It increased the price of chocolates by 9-15%, biscuits by 10-19%, and gum by 10%. “In difficult times, these are go-to categories,” said Van De Put in November.
According to a media report, in late July, Russia’s Association of confectionery industry “Askond”, of which Mondelez is a member, wrote to its member organizations indicating that multinational confectionery producers that localized production in Russia should petition the EU to remove sanctions on exports to Russia of certain ingredients used in confectionery production. By remaining a member of Askond, Mondelez is associated with such attempts to lift restrictions imposed on Russia.
As noted by Bennett Freeman, former U.S. Deputy Assistant Secretary of State for Democracy, Mondelez has a choice: “either to continue to support Russia’s ability to wage war in Ukraine, and face exposure to heightened financial, reputational and legal risks, or to show corporate and personal leadership in standing up for the same rules-based international order, peace and stability which the company has benefited from over the years and which Russia is now undermining.”
“As B4Ukraine coalition, we will take further decisive actions to encourage Mondelez to do the right thing, put people over profit and pull out of the toxic Russian market,” Freeman said.
Founder & President of One Philosophy & WeAreUkraine and a member of B4Ukraine Steering Committee Nataliya Popovych added: “After all, how do American consumers feel knowing that many iconic brands that American families trust daily are continuing to operate in Russia and paying taxes to the regime committing devastating war, war crimes, and atrocities? All this while the US government has provided nearly $50 billion dollars worth of humanitarian, military, and financial aid to Ukraine and dozens of American volunteers are helping Ukrainians on the ground.”
B4Ukraine wrote to Mondelez to request a meeting regarding its ongoing operations and risk exposure in Russia in November 2022, and was told: “We appreciate your support of the people of Ukraine and thank you for sharing your perspective. We have received feedback from a range of stakeholders and will review your input carefully.”