Unilever reportedly plans to continue producing ice cream in Russia even after demerging the rest of the division from the business.
In March, the FMCG giant announced its intention to separate its ice cream business from the company.
Unilever stated that the demerger would transform the group into “a standalone, more focused business,” providing increased “operational and financial flexibility.”
Continue Exploring: Unilever announces spin-off of ice cream business, 7,500 job cuts planned in cost-cutting effort
The manufacturer of Ben & Jerry’s, the world’s largest ice cream producer, indicated that demerging the assets into a listed company was “the most probable route for separation.”
According to reports from media outlets such as The Telegraph newspaper in the UK, Unilever is purportedly excluding its Russian ice cream division from the demerger.
Consumer-goods companies have been under public pressure to cease operations in Russia due to its invasion of Ukraine.
Unilever has been listed among companies labeled as “sponsors of war” by the National Security and Defense Council of Ukraine. Upon Unilever’s inclusion on the list, the NACP noted that the company’s profits in Russia doubled from 2021 to 2022.
In July of last year, reports surfaced that Reginaldo Ecclissato, Unilever’s chief business operations and supply chain officer, had informed the campaign group the B4Ukraine Coalition that the company believed it was not appropriate to abandon their personnel in Russia.
Regarding the potential sale of the business, Ecclissato purportedly mentioned that they had not yet identified a solution “that prevents the Russian state from potentially gaining additional advantages while also protecting our personnel.”
He further stated that since the commencement of the war, Unilever had implemented stringent restrictions on its operations, including halting all capital flows to and from the country and suspending the import and export of its products.
Ecclissato was quoted as saying, “The Russian government has explicitly stated that employees of companies in Russia that abandon or reduce their operations could be subject to criminal prosecution. Closing our ice cream business could be interpreted as such a violation.”
Continue Exploring: HUL mulls independent ice-cream unit amid Unilever’s global spin-off, sale prospects loom large