UK – Unilever has announced plans to retain its ice cream production operations in Russia, even as it proceeds with the demerger of its broader ice cream business.

The FMCG giant, known for brands such as Ben & Jerry’s, stated in March its intention to separate the ice cream division into a standalone, listed company to enhance operational and financial flexibility.

Despite public pressure on consumer goods companies to exit Russia following the country’s invasion of Ukraine, Unilever will reportedly not include its Russian ice cream operations in the demerger.

According to analysts,  the decision aligns with Unilever’s strategy to maintain its presence in Russia while managing geopolitical and operational challenges.

“The decision has placed Unilever under scrutiny, particularly from the National Security and Defense Council of Ukraine, which has labeled the company as a “sponsor of war.”

This designation followed reports that Unilever’s profits in Russia doubled from 2021 to 2022, despite the ongoing conflict.

Reginaldo Ecclissato, Unilever’s Chief Business Operations and Supply Chain Officer, addressed concerns about the company’s continued operations in Russia.

In discussions with the B4Ukraine Coalition, Ecclissato emphasized Unilever’s commitment to its employees in Russia and highlighted the difficulties in finding a viable exit strategy that would not inadvertently benefit the Russian state or jeopardize the safety of its workforce.

Ecclissato noted that Unilever had implemented stringent measures since the war’s onset, including halting all capital flows into and out of Russia and stopping the import and export of products.

He further explained that the Russian government has issued warnings that companies abandoning or reducing their operations in the country could see their employees face criminal prosecution.

The company’s strategic move to demerge its ice cream division aims to create a more focused business entity with enhanced operational capabilities.

However, the exclusion of the Russian assets from this demerger highlights the complexities multinational corporations face in navigating geopolitical tensions while protecting their business interests and employees.

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