Unilever defends “essential” operations in Russia, granting 3,000 employees to be conscripted if called

25 Jul 2023 --- Unilever has responded to a letter from B4 Ukraine – a coalition of civil society organizations aiming to cut Russia off from means to conduct war – which calls for the company to leave and stop investing in Russia based on the persistent damage the country has committed against Ukraine. 

The food and personal care giant operates in Russia with a perfume and cosmetics factory in St. Petersburg. The company maintains that its best solution is to continue operations for “everyday essential food and hygiene products” under “strict constraints.”

However, B4 Ukraine is calling out the company for continuing to supply ice cream, not deeming it an “essential” food product. 

In addition, in its statement, Unilever says it will allow its employees to be conscripted if called. The cooperation has previously been called one of the most “egregious offenders” in a 2022 report by the Moral Rating Agency for its operations in Russia. 

Determining essential products
B4 Ukraine calls for a definition and list of goods Unilever considers essential in light of the conflict. 

Unilever responds to B4 Ukraine’s call for it to leave Russia.The organization also calls for a full list of non-essential goods that it stopped producing since the outbreak of the war, including indications if Unilever considered whether its goods could be replaced with local substitutes. 

Unilever responded by saying the majority of its business in Russia comprises personal care and hygiene products, alongside ice cream. 

Its reasoning for this points to the Russian government making it clear that employees of companies in Russia that abandon or run down their business may face criminal prosecution. The company stipulates that the closure of Unilever’s ice cream business could be considered such a breach. 

The multinational consumer packaged goods company also notes its investment in a new €20 million (US$21.3 million) production facility in Kyiv, Ukraine, last March. The facility is set to open next year, manufacturing personal care products, including shampoos and shower gels for brands such as Dove, Axe, TRESemmé and Clear. 

The reopening of Unilever’s operations in Ukraine was called to attention as representative of the company’s “long-term commitment to the country.” Unilever claims that the hub will predominantly supply the local Ukrainian market but has future potential to export to European markets and will employ approximately 100 people.

Russia can conscript Unilever employees
The cooperation states it “absolutely condemns the war in Ukraine as a brutal, senseless act by the Russian state.”

“We continue to join the international community in calling for stability and peace in the region,” it underscores. 

However, in Unilever’s response to B4 Ukraine, Reginaldo Ecclissato, chief business operations and supply chain officer shares that the company will “always comply with all the laws of the countries it operates in.”B4 Ukraine says Unilever has reneged on its promises to stop all media and advertising spending in Russia.

“We are aware of the law requiring any company operating in Russia to permit the conscription of employees should they be called.” 

Time to leave
B4 Ukraine acknowledges Unilever’s stance against the war but calls time on their ongoing business presence in the country.

“While we understand the legal and administrative complexities involved in leaving Russia, we believe that after a year of conflict, over 80,000 documented war crimes committed by Russia, there can be no more ambiguity,” B4 Ukraine writes.

B4 Ukarines’ letter additionally includes data revealing that Unilever has reneged on its promises made in March 2022 to stop all media and advertising spending and profiting from its presence in Russia. 

A report by Follow the Money shows that Unilever Rus has “doubled its net profit, as can be seen in the Russian annual report for 2022: from 4.8 billion rubles (US$53.3 million) to more than 9.2 billion rubles (US$102 million).”

Unilever defends that it adhered to its commitment in March 2022 and that the advertising referred to in the report was carried out by retailers and was contractually committed to before the war broke out. 

Earlier this month, Ukraine’s National Agency on Corruption Prevention added Unilever to its International Sponsors of War red list. This was due to the food and personal care giant’s “ongoing presence in Russia and its significant taxes to the Russian state budget.” 

By Sabine Waldeck