RUSSIA – Moscow has announced Yakub Zakriev, deputy prime minister and agriculture minister of Chechnya as the new head of the yoghurt maker Danon’s Russian subsidiary.
The appointment comes just days after Moscow announced it was taking control of Danone’s Russian operations alongside Carlsberg putting them under the country’s temporary management.
According to Russian President Vladimir Putin, new rules were introduced to allow Moscow to seize the two company’s assets from unfriendly countries seeing that many countries halted their operations in Russia following the invasion of Ukraine.
Danone said in October it would relinquish control of its dairy food business in Russia, which could have led to a write-off of up to US$1.12 billion. Global companies had at the time been announcing costly exits from Russia.
Danone had been weeks away from achieving an agreement to sell its Russian subsidiary, which has 7,500 employees spread across 13 factories.
Danone reviews legal options after Russia seizes local business
Meanwhile, the French dairy group is reviewing its legal options which include writing to Moscow while in contact with French authorities, including President Emmanuel Macron’s office.
In addition, Danone said, like everyone else, they learnt the news when the Russian presidency announced it to the media and had been very surprised, especially as the company had initiated a very organised process to leave the country.
Around 1,000 international firms began the process of leaving Russia after its illegal invasion of Ukraine in February 2022, but many have yet to successfully sell their assets in the country.
Moscow’s action highlighted the vulnerability of other consumer products companies that still have operations in Russia, some of which have announced plans to leave.
The nation noted that global consumer company, Unilever and Swiss food giant, Nestle have remained in Russia, as well as British American Tobacco, which is trying to sell its unit.
Reckitt last year said it had begun a process to transfer ownership of its Russian business, which if successful would make it the first major personal goods maker to do so following the country’s invasion of Ukraine.
Western firms have faced tough exits from Russia after the government in December said they must sell their operations for at least half price and pay 10% to the state.
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