Corporations are hiding behind the excuse of providing “essentials” to continue trading in Russia: who they are
WEDNESDAY, 23 MARCH 2022, 00:30 - DANA GORDIYCHUK
The world's biggest food and sconsumer-product companies are using the excuse of providing "bare essentials" in order not to stop sales under the pressure to exit the market in the aggressor state, Russia.
Source: Wall Street Journal.
Some examples include Gillette razor blades, Lay’s potato chips and Air Wick air fresheners, ice cream, children’s cosmetics and facial cleansers, which continue to be sold on the shelves of Russian stores. All of these brands are owned by corporations such as PepsiCo, Procter & Gamble, Unilever and Reckitt Benckiser Group, which had announced their exit from Russia except for the sale of "essential" goods.
PepsiCo Inc., which has a large dairy business in Russia, has said it will stop selling soda and focus on milk, cheese, yoghurt, baby food and potato chips. Last week, according to the WSJ, the company was criticised for ordering 2.2 tons of potatoes with delivery from Scotland to Russia. Part of this order goes to the aggressor this week.
Unilever PLC had also said earlier that it would limit sales to "everyday essential goods made in Russia to people in the country." For example, as it turns out, they have included in this category "Inmarko" ice cream, the "Black Pearl", "Pure Line" and "Velvet Hands" cosmetics brands. Sales of the children's "Little Fairy" brand, which makes children's cosmetics such as lip gloss and nail polish, also continue.
Procter & Gamble, another company that promised to sell only "basic health, hygiene and personal care items needed by the many Russian families who depend on them in their daily lives." They have included Gillette razor blades, which before the war supplied roughly 70% of Russia’s shaving market..
At the same time, the company has increased the price of blades by 50% due to higher raw materials and logistics costs. Prices for washing powder increased by 25%, more than 30% for feminine hygiene products and nearly 50% for baby diapers.
In a comment, a company spokesman said that P&G reduced production and focused on inexpensive and essential goods. However, the company refused to specify which products they stopped selling. P&G has factories in St. Petersburg and Moscow.
Reckitt Benckiser is continuing to sell its Veet body hair removal line and Air Wick air freshener. RB also used the excuse of supplying "ordinary Russians" to continue selling "basic hygiene and health products for their everyday needs." The company employs about 1,300 Russians.
Nestlé, the world's largest food company, has six factories in Russia that produce goods such as candy brands Komilfo and Sudarushka. The company said that all the factories are operational, and 90% of what Nestlé sells in Russia is made locally.
The company employs more than 7,000 Russians. Nestlé does not consider work in Russia unethical despite the war against Ukraine and does not take into account the pressure of Ukrainian officials and the international community.
According to Paolo Pasquariello, a finance professor at the University of Michigan’s Ross School of Business in his comment to WSJ, these companies label goods as "essential" even when they do not serve a clear medical need. Instead, it looks like an attempt to "window-wash their choice in order to mitigate the reputational loss they will suffer".