The FMCG giant attracted criticism after it revealed 2% of net profit in 2022 came from Russia
Unilever still supplies everyday products made in Russia to consumers within the country
Nearly a year on from Russia’s invasion of Ukraine on 24 February 2022, the FMCG giant said in a statement: “We understand why there are calls for Unilever to leave Russia.
“We also want to be clear that we are not trying to protect or manage our business in Russia.
“However, for companies like Unilever, which have a significant physical presence in the country, exiting is not straightforward.”
The Dove and Lifebuoy owner ceased all imports and exports of its products in and out of Russia from March last year.
It has also stopped all media and advertising spend, as well as all capital flows in and out of the country.
However, it still supplies everyday food and hygiene products made in Russia to consumers within the country.
This stance has attracted criticism.
In March 2022, Kyiv’s ambassador to the UK, Vadym Prystaiko, pointed the finger at Unilever, warning: “There is no place for responsible businesses”, in Russia.
But criticism escalated after 9 February, following the release of Unilever’s Q4 and full-year 2022 results.
The company announced a 9% underlying sales increase for full-year 2022, primarily boosted by record price hikes.
But analysts were quick to spot that Unilever had an asset position of €900m in Russia, and that business in the country had contributed to 1.4% of turnover and 2% of the group’s net profit.
In its response, Unilever outlined three primary options when assessing the future of its business in Russia.
The first, it said, would be to close down the business, which currently employs approximately 3,000 people across four manufacturing sites and a head office.
The second option would be to sell the business.
But, according to Unilever, both options could result in the business and brands in the country being appropriated by the Russian state.
The third route is to allow the business to continue to run with the constraints that were put in place last March.
The statement continued: “To be clear, none of these options are desirable.
“Nevertheless, we believe the third remains the best option, both to avoid the risk of our business ending up in the hands of the Russian state, either directly or indirectly, and to help protect our people.”
Unilever added that it would continue to keep its position under close review.
The clarification followed Unilever’s earnings statement, published 9 February, in which it said: “While the potential impacts remain uncertain, there is a risk that the operations in Russia are unable to continue, leading to loss of turnover, profit and a write-down of assets.”