UK – The world’s biggest ice cream company, Unilever, is opting to either abandon, sell or retain its operations in Russia, but the “least bad” option is to “pursue its business but in a highly constrained manner”.

The company has been facing heated backlash for remaining in Russia, with the Ukraine Government naming it as an “International Sponsor of War.”

The company, which owns Knorr soup and Ben & Jerry’s ice cream, employs over 3,000 people in Russia, operating in the country through Unilever Rus.

The group’s local Russian business with registered offices in Moscow and Omsk, doubled profits to 9.2bn roubles last year, according to the Dutch investigative group Follow the Money, and increased advertising spend by 10% to 21.7bn roubles.

However, the Russian government has initiated unprecedented moves against foreign companies in the country.

In a decree signed by Russian President Vladimir Putin in April, the country’s government has been allowed to place foreign assets in the country under its temporary control if Russian assets abroad are seized or threatened by its “unfriendly” countries.

The powers have already been put into practice on Danone and beer company Carlsberg. Yakub Zakriev, deputy prime minister and agriculture minister of Chechnya, has been appointed as the new head of the yoghurt maker Danon’s Russian subsidiary.

 Carlsberg, a Danish multinational brewing company with a significant presence in the country and employs 8,400 across eight plants, has not been assigned to any custodian but still remains on temporal control of the government.

Moscow’s actions highlight the vulnerability of other consumer products companies that still have operations in Russia, some of which have announced plans to leave.

Unilever CEO Hein Schumacher told journalists that there has not been in touch with the Russian government in the wake of its moves on Danone and Carlsberg.

“The first option is to abandon our business. We feel that, in effect, that could result in it being nationalized, given all the developments that have recently taken place,” Schumacher explained.

“The second option is to sell the business, but the reality is, we have not found a viable solution that meets our stated objectives. None of the options are actually good, but the final option of operating our business in a constrained manner is the least bad, and that is where we are.”

Unilever had said in February “there is a risk” that it may have to stop doing business in Russia, and that it might have to take a loss or write down its assets there.

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