Nestlé to halt sales of most brands in Russia

Swiss food giant bows to criticism of continued presence in Russian markets

Nestlé, the world's largest food company, is to halt sales of KitKat, Nesquik and several dozen other brands in Russia after criticism from Ukraine's leaders over its presence in the country.

The Swiss group said on Wednesday it would “suspend the vast majority of our prewar volume in Russia”, paring down its offering to products such as baby formula and medical nutrition. This adds to measures already announced such as a pause in capital investment.

The move comes almost a week after Ukraine's prime minister Denys Shmyhal tweeted that he had spoken with Nestlé's chief executive Mark Schneider about "the side effect of staying in the Russian market".

“Unfortunately, he shows no understanding. Paying taxes to the budget of a terrorist country means killing defenceless children and mothers,” Mr Shmyhal said at the time. Ukraine’s president Volodymyr Zelenskiy also attacked Nestlé in a speech at the weekend, as part of a broader campaign against multinationals operating in Russia.

Nestlé said on Wednesday that it did “not expect to make a profit in the country or pay any related taxes for the foreseeable future in Russia”, adding that “any profit will be donated to humanitarian relief organisations”.

While the company does not expect to pay corporate tax, which is levied on profits, it remains liable for other Russian levies such as value added tax and property tax.

It has more than 7,000 staff in Russia, but said on Wednesday it was “identifying solutions for our people and our factories in Russia”. “We will continue to pay our people,” it said, but did not specify a timeframe.

The suspensions include most products in categories such as coffee and pet food, said a person familiar with the situation, with exemptions for items such as specialist pet foods provided to veterinary clinics.

The company said its approach “upholds the principle of ensuring the basic right to food”. It has also suspended advertising and “non-essential” imports and exports.

Nestlé continues partial operations in Ukraine, where it has 5,800 employees. – Copyright The Financial Times Limited 2022