Cadbury owner says investors do not ‘morally care’ about Russian business

Mondelez products have faced boycotts in Sweden, Norway and Ukraine over the company’s reluctance to leave Russia

The head of Cadbury owner Mondelez has said investors did not “morally care” whether companies continued to do business in Russia, and that the company’s own shareholders had not pressured the chocolate maker to leave the country after its invasion of Ukraine.

“I don’t think [investors] morally care...” chief executive Dirk Van de Put said in an interview. He argued that shareholders would care more if a company had a sizeable business in Russia, where disruption could materially affect their investment.

“If you have an important Russian business, the hit on the company would be huge, and that becomes a different discussion,” he said.

Mondelez’s Russian business contributed 2.8 per cent of its global revenues in 2023, down from 4 per cent in 2022. “There has been no shareholder pressure whatsoever,” Mr Van de Put said, adding that a handful of funds in Europe had asked some questions about the business, “but there was no request to leave Russia from any of our investors”.


Among Mondelez’s largest shareholders are Vanguard, BlackRock, Capital Group and State Street Global Advisors. All four declined to comment.

Under US law, asset managers must prioritise financial results for investors, not moral concerns, and Mondelez’s Russia revenue falls well under the 5 per cent threshold that is considered a benchmark for material issues, according to stewardship experts.

Like other companies that have continued to do business in Russia, including Nestlé and Unilever, Mondelez has drawn criticism from consumers and Ukrainian groups who argue western companies still operating in the country are funding the invasion and contributing to Ukrainian deaths.

Mr Van de Put stood by his company’s decision to continue operations in the country, saying that those who had exited had left their assets to “friends” of Russian President Vladimir Putin. These were likely to generate more cash for Putin’s war coffers than the tax Mondelez pays in the country, he argued.

“I wonder what happened with the companies that were sold, who got them and what are they doing with the cash that those companies generate? They all went to friends of Putin,” said Mr Van de Put. “And you can bet that the cash they generate [that] goes to the war is much bigger than the taxes we would pay.”

Mondelez employs 2,700 people in Russia across three factories, and 10,000 farmers indirectly. The Russian business now operates as a standalone unit, Mr Van de Put said. The company sold fewer goods in 2023, he added, but was more profitable because of lower investment.

His comments reflect a shift in the way consumer-facing companies are talking about their Russian subsidiaries. Following its full invasion of Ukraine, scores of western companies announced they were leaving the country, but in reality few have managed to exit entirely.

Now that a large majority are still operating with little chance of leaving, chief executives are beginning to be more transparent about their reasons for staying in Russia, particularly since Danone and Carlsberg’s Russian subsidiaries were seized by the Kremlin last summer and placed under “temporary management”.

Mr Van de Put’s comments came just before the FT reported that French food group Danone was planning to sell its Russian business to a member of its Kremlin-installed management linked to the nephew of Chechen strongman Ramzan Kadyrov.

Unilever chief executive Hein Schumacher said in a trading update late last year that the steps the company had taken to “contain” its Russian business had succeeded in reducing its financial contribution to Moscow.

“I understand why there are calls for our company to leave the country and therefore we will simply continue to look at our options,” he said. Unilever employs 3,000 people in Russia, and the business represented about 1 per cent of group turnover in 2023.

Nataliia Shapoval, chair of the KSE Institute at the Kyiv School of Economics, said boycotts of Mondelez products in Sweden, Norway and Ukraine had shown that consumers did care about the company’s reluctance to leave Russia. A Mondelez factory in Ukraine, meanwhile, was looted and destroyed by Russian invading forces in 2022, showing “Russia doesn’t just care about the rights of Ukrainians — it doesn’t care about their rights either,” she said.

Mr Van de Put said it was clear that Russian authorities were trying to stop western companies from leaving. “We try to not be confrontational or make big statements and just get on with our business,” he said.

“In both cases [Danone and Carlsberg], they announced that they were selling their business...” he said. “If you leave you will be punished. That is clear.” – Copyright The Financial Times Limited 2024

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