Nestlé stops production and sales of non-essential goods in Russia

Nestlé has bowed to pressure and stopped the local production and sales of non-essential goods such as KitKats and Nesquik in Russia.

The food and drinks group announced this week that it had stopped the import and export of non-essential goods but said on Wednesday that it was also stopping the vast majority of its local production of such items including coffee, confectionery and pet food. Only production of a limited number of essential items, such as baby food, food for hospital use and some basic pet food will now continue.

The move comes after Ukraine’s president, Volodymyr Zelenskiy, called out Nestlé and several other companies for staying in Russia after its invasion of Ukraine. He accused the KitKat maker of not living up to its “Good Food, Good Life” slogan, building on a wave of online criticism from shoppers, activists, investors and political figures.

The brands Nestlé is now suspending make up the “vast majority of [prewar] volume and sales” in Russia, which amounted to 1.7bn Swiss francs (£1.4bn) in 2021, according to the company.

“As the war continues in Ukraine, our activities in Russia will focus on providing essential food, such as infant food and medical/hospital nutrition – not on making a profit,” the company said in a statement.

“We do not expect to make a profit in the country or pay any related taxes for the foreseeable future in Russia. If any profit is made, it will be donated in its entirety to humanitarian relief organisations.”

A spokesperson for Nestlé said that it would continue to pay its Russian workers, adding: “We are in the process of identifying solutions for our people and our factories in Russia.”

The company is meanwhile continuing to operate in Ukraine. A spokesperson said Nestlé was still able to deliver 60% of its prewar volumes in the country but had halted operations at its Kharkiv noodle factory owing to heavy shelling in the area.

Most western brands have now ceased imports to Russia, while goods made in the country have been pulled from the shelves in British, US and European supermarkets.

Some prominent US and UK retail brands have said they are still operating in Russia because they have been unable to force independent franchise operators to close down.

Burger King’s owner, Restaurant Brands International, said last week fast food restaurants were still operating with its brand because its former Russian partner had refused to shut down. Other companies in similar situations include the UK retailer Marks & Spencer and the hotel groups Accor and Marriott.

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