Status: 03/24/2022 08:11 a.m
Food giants like Nestlé are among the Western corporations that are sticking to business in Russia. They justify this with responsibility for basic services. But how moral is baby food?
A “shitstorm” against corporations like Nestlé has been brewing on social media. Hundreds of Twitter users are calling for a boycott of the world’s largest food manufacturer’s products. The hacker group Anonymous also condemned Nestlé’s involvement in Russia.
The Ukrainian government describes Nestlé as a “sponsor of Putin’s war”. Prime Minister Denys Schmyhal complained that the food giant was paying taxes for a terrorist state’s budget. That means “killing defenseless children and mothers”.
“Our children are dying, our cities are being destroyed”
Ukrainian President Volodymyr Zelenskyj had already criticized Swiss companies like Nestlé over the weekend, which do not want to leave Russia. Business continued “even though our children are dying and our cities are being destroyed”. In a speech to Americans, Selenskyj publicly pilloried other food manufacturers such as Mondelez and Unilever.
Nestlé defends itself against the accusations and its engagement in Russia. It is our responsibility to continue to provide the Russian population with essential food. These included baby food, breakfast cereals and pet food. “We have stopped all imports and exports from Russia – except for essential products,” said a Nestlé spokesman in Swiss media. According to their own statements, the Swiss are not making a profit with the remaining products.
Delivery stop for chocolate bars and coffee capsules
The group no longer wants to sell chocolate bars such as Kitkat, Nespresso coffee capsules and branded mineral water in Russia. In addition, Nestlé has stopped investing in Russia and has stopped advertising. According to the company, the taxes that Nestlé pays in Russia are not as high as they claim. According to the group’s own calculations, they are well below 100 million Swiss francs. So far, the group has generated around two percent of its total sales in Russia.
The Danone concern also continues to produce and sell dairy products and baby food on the Russian market. The French justify this – like Nestlé – with their responsibility towards the population. The competitor Unilever also follows two tracks. The British have halted their exports, but continue to supply their Russian-made staples and hygiene items. And even the Pepsi group PepsiCo remains partially involved in Russia and still sells baby milk. On the other hand, he no longer wants to deliver sodas and other soft drinks to Russia.
Fear of nationalization and retaliation
Whether it’s Nestlé, Unilever, PepsiCo or pharmaceutical companies like Roche – they all justify their business in Russia by supplying essential goods such as food or medicines. A withdrawal would only harm the population. However, there may also be another, very tangible reason for the corporations to remain in the Russian market: the fear of nationalization of factories and retaliatory measures. If production were stopped or shut down, Moscow could intervene.
Kremlin ruler Vladimir Putin has already threatened to confiscate the assets of companies that cease operations in the country. And: Russian prosecutors are said to have warned that employees could be arrested and prosecuted if the production of essential goods is not guaranteed.
Criticism of Nestlé & Co raises the old question of how morally companies must act. Are they still allowed to do business in war zones? Business ethicists refer to the responsible role of corporations as “corporate citizens”. Companies that don’t leave Russia now would lose their social acceptance.
“Hall of Shame” in the United States
Others argue that the criticism of food companies distracts from the debate about a possible embargo on Russian gas and oil imports. In addition, baby milk powder and breakfast cereals are not on the sanctions list. However, the question remains whether sanctions are only effective if their consequences are also felt in many people’s everyday lives. And where to draw the line to essential goods. Former Nestlé boss Peter Brabeck once said: “There is a human right to water, but not to a filled swimming pool.”
Public pressure against the food companies is still limited. But it could increase rapidly if Russia’s attacks on the neighboring country remain so fierce or if the suffering of Ukrainians even increases. In the USA in particular, the corporations are under constant observation. There, the criticism of the companies that are still active in Russia goes much further than in Germany. In a list known as the “Hall of Shame,” for example, scientists from Yale University listed the companies that are sticking to business in the Russian market. She currently names 74 corporations.
These companies also include some pharmaceutical manufacturers. The Swiss Novartis Group still operates production facilities in the country. Bayer, Pfizer and Eli Lilly have discontinued parts of their Russian activities, but continue to supply drugs for diseases such as diabetes and cancer. And the Hessian company Stada, which depends heavily on sales in the country, wants to stick to deliveries to Russia so far.