A global Coalition of civil society organizations, B4Ukraine, has today called on food giants Mars and PepsiCo to exit Russia and for the US government to issue a business advisory, warning US businesses of the growing legal, reputational and financial risks of doing business in the country.
The call comes after Ukraine’s National Agency for Corruption Prevention (NACP) designated the two US-based fast moving consumer goods companies (FMCGs) international sponsors of war. The decision to include Mars Inc. and PepsiCo on the growing list of corporate war financiers was made on the basis of these companies’ significant material contribution to the Kremlin’s war efforts.
“The inclusion of the most well-known American brands on Ukraine’s official list of corporate war financiers is deeply disheartening. After 18 months of Russia’s brutal war, which is taking the innocent lives of Ukraine’s bravest and brightest, Mars, PepsiCo, Mondelez International, Procter & Gamble, Unilever and others have fully exhausted their moral reservoir by continuing to do business in the aggressor state that shows no respect for human lives or the rule of law,” said Nataliia Popovych, Member of the Steering Committee of the B4Ukraine.
Research from B4Ukraine and the Kyiv School of Economics shows that in 2022, American companies generated more revenue in the Russian market and paid more in taxes to the Russian government than any other country. These companies earned more than $40 billion in revenue, paying $712 million in taxes. FMCGs in particular comprised the second-highest revenue-generating sector, accounting for over $21 billion in revenue from Russia in 2022.
FMCG companies often cite the “essential” nature of the goods they supply as a reason to stay. However, many are stretching the definition to include non-essential goods like chocolates, biscuits, shampoo or aftershave. In engagements with B4Ukraine and investors, many companies refuse to disclose which goods they consider to be essential/non-essential or the criteria by which they have made this decision.
“It is time for the Biden Administration to make its position known to US companies, that paying profit tax to Russia is, in no uncertain terms, helping to fund this war,” says Popovych. “The most effective means right now? Issue a business risk advisory that eliminates this ‘essential goods’ gray zone. It’s time to stop the misuse of the term ‘essential’ and be very clear about the direct correlation between paying taxes to the Kremlin and the continuation of its unprovoked aggression.”
B4Ukraine once again calls on the US government to issue a business advisory to inform individuals, businesses, financial institutions, and other persons of the heightened risks associated with doing business in Russia, and particularly business activity that could benefit the Russian military.