Nestlé, tobacco groups and game maker Sony join Russia pushback

0

March 9 (Reuters) – Nestle (NESN.S), Philip Morris (PM.N) and video game maker Sony (6758.T) joined the list of multinationals pulling out of Russia on Wednesday as pressure mounts from Western consumers to take a stand against the invasion of Ukraine.

Nestlé, the world’s largest packaged food group, has aligned itself with rivals Procter & Gamble (PG.N) and Unilever (ULVR.L) in halting investment in Russia, and Mondelez International (MDLZ.O) will cut non-essential activities while helping to maintain the “continuity” of the Russian food supply.

Cigarette maker Philip Morris said it would cut manufacturing, Imperial Brands (IMB.L) suspended it and camel maker British American Tobacco Plc (BATS.L) said its business in Russia was continuing to operate , but that he had suspended his capital investments.

Join now for FREE unlimited access to Reuters.com

Register

Sony, whose film studio has already halted releases in Russia, said its PlayStation game unit will halt shipments and operations in Russia. “Sony Interactive Entertainment joins the global community in calling for peace in Ukraine,” he said.

Some companies are taking similar action without calling Russia. Many companies find it difficult to do business in Russia due to sanctions and lack of shipping, in addition to pressure from consumers and investors.

Heavy equipment maker Deere & Co (DE.N), saying it was “deeply saddened by the significant escalation of events in Ukraine”, said it ended shipments to Russia two weeks ago, then to Belarus, and said he would follow the United States and international sanctions.

Miner Rio Tinto (RIO.L) said it was struggling to maintain supplies of Russian fuel to its Mongolian copper mine. Read more

“The reality is that Mongolia has two very big and powerful neighbors, so it’s very important for us to maintain healthy, peaceful and balanced relations,” Rio’s copper business chief Bold Baatar said, referring to Russia and China.

But pressure is mounting in the West and hotel companies Hilton Worldwide Holdings (HLT.N) and Hyatt Hotels Corp (HN) have announced they will suspend development in Russia. Read more

Coca-Cola Co (KO.N) and McDonald’s Corp (MCD.N) halted sales in Russia on Tuesday in symbolically powerful moves. A senior Russian ruling party official has warned that foreign companies that close could end up having their operations nationalized. Read more

McDonald’s said the temporary closure of its 847 stores nationwide would cost it $50 million a month. Read more

Sportswear company Adidas (ADSGn.DE) also quantified the cost of scaling back its operations, saying it would cost up to 250 million euros ($276.7 million). Read more

Yum Brands Inc (YUM.N), parent company of fried chicken giant KFC, said it was suspending investment in Russia, a market that helped it achieve record development last year. Read more

Carlsberg (CARLb.CO) said it was suspending Russian brewing of its eponymous beer brand while keeping its Russian Baltika brand in operation.

“We feel a moral obligation to our Russian colleagues who are an integral part of Carlsberg and who are not responsible for government actions,” Carlsberg said, adding that he was withdrawing his financial guidance for the year.

E-commerce company Shopify Inc (SHOP.TO) joined the crowd, saying it would suspend Russian operations and collect no fees from Ukrainian merchants, citing millions of Ukrainian refugees in need of help. Read more

“LAWS OF WAR”

In response to the exodus, Andrei Turchak, secretary of the general council of the ruling United Russia party, warned that Moscow could nationalize idle foreign assets.

“United Russia proposes to nationalize the production plants of the companies announcing their exit and the closure of production in Russia during the special operation in Ukraine,” Turchak wrote in a statement posted on the party’s website Monday evening. Read more

The statement named Finnish private food companies Fazer, Valio and Paulig as the latest to announce closures.

“We will take severe retaliatory measures, acting in accordance with the laws of war,” Turchak said.

PUNISHMENTS

Moscow, which calls its invasion of Ukraine a “special military operation”, has been hit by sweeping Western sanctions that have stifled trade, led to the collapse of the ruble and further isolated the country.

Banks and billionaires have also been targeted, with the European Commission preparing new sanctions targeting other Russian oligarchs and politicians and three Belarusian banks, Reuters reported. Read more

While the war in Ukraine and the sanctions have driven up the prices of raw materials that Russia exports like oil, natural gas and titanium, these sanctions have largely prevented Moscow from profiting from the high prices.

On Tuesday, the United States banned imports of Russian oil. Read more

U.S. oil services company Schlumberger (SLB.N), which derives about 5% of its revenue from Russia, said the ongoing dispute would likely hurt results this quarter. Read more

Global commodities trader Trafigura Group has raised a $1.2 billion revolving credit facility from banks to help weather soaring energy and commodity prices. Read more

Norway’s Yara (YAR.OL), a leading fertilizer maker, said on Wednesday it would cut ammonia and urea production in Italy and France due to soaring gas prices.

($1 = 0.9037 euros)

Join now for FREE unlimited access to Reuters.com

Register

Reporting by Reuters bureaus Jacob Gronholt-Pedersen, Rithika Krishna in Bengaluru, Dawn Chmielewski in Los Angeles, Bianca Flowers in Chicago, Denny Thomas in Toronto and Ernest Scheyder in Houston Writing by Sayantani Ghosh, Paul Sandle and Peter Henderson Editing by Jason Neely , Jane Merriman and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

Share.

About Author

Comments are closed.