Ukraine’s National Agency on Corruption Prevention designates American snacking giant Mondelez International an international sponsor of war, adding to the pressure to exit Russia from the company’s employees and civil society groups, including the B4Ukraine Coalition.
The decision was made on the basis of Mondelez’s continued operations in Russia, where it is one of the major revenue earners and taxpayers and, therefore, an indirect contributor to the Kremlin’s war coffers.
The maker of Oreo cookies, Milka & Toblerone chocolates, Mondelez is a global and Russian market leader in sweets and biscuits, employing more than 2,500 people and running three factories in Russia. According to the company’s CEO Dirk Van de Put, the American snacking giant also supports “30,000 suppliers, most of whom are local farmers.”
Shortly after the start of Russia’s illegal war against Ukraine, Mondelez issued a statement that condemned “this unjust aggression” and promised to scale back “all non-essential activities in Russia,” focusing on providing “basic offerings,” while discontinuing new capital investments and suspending advertising expenditure.
Yet, according to the latest available data, Mondelez has increased its exports of such signature products as Milka chocolates into Russia since the start of the war. The latest 2022 financial figures also reveal an increase in the company’s revenue by 38%, its profit by 303% (the net profit amounted to ₽27,1 billion), and capital by 159%, as compared to 2021 figures. At the time of publication, Mondelez has not responded to B4Ukraine’s questions on these figures.
According to B4Ukraine’s internal sources, Mondelez has faced a significant internal backlash from employees who have put forward two global petitions to the company’s senior management with a plea to “do what’s right.” The latest petition is estimated to have been signed by 1,300 employees globally.
Companies featured on the NACP’s list are flagged as “international sponsors of war” within the compliance database WorldCheck. Since banks and insurance companies use the database to assess risks, Mondelez’s access to personal and corporate finances could be limited as a result of the Ukrainian government’s designation. The inclusion in the official list of international sponsors of war is likely to affect the company’s reputation for years to come.
The B4Ukraine Coalition has tried to engage with Mondelez in order to inform its leadership about the heightened financial, legal and human rights risks associated with continued business operations in Russia. Our latest letter puts forward a list of key questions to the company’s management, including questions on due diligence to prevent the delivery of its products to the Russian military and the explanation behind rising revenue and profit, given the announced approach of “scaling back” its business operations in Russia.
Unfortunately, and similar to our previous attempts, the company has not agreed to our requests to engage. The B4Ukraine Coalition calls on Mondelez to do the only right thing: To put people over profits and to pull out of the toxic Russian market.