Danone is seeking an exit from its dairy and yoghurt business in Russia in a transaction that could result in a write-off of up to €1 billion for one of the world’s biggest makers of consumer goods.
Almost eight months since Russia invaded Ukraine, the French group said on Friday that it would “initiate a process to transfer the effective control” of the business, which includes 13 factories, 7,200 employees, and accounts for 5 per cent of its annual sales of about €24 billion.
It remains unclear who will take over the business whose most popular brand is called Prostokvashino, or if there would be proceeds from a sale. The move would not represent a complete exit from Russia, however, since Danone will continue to sell baby formula in the country.
“Danone considers that this is the best option to ensure long-term local business continuity, for its employees, consumers and partners,” it said in a statement.
Like other consumer goods companies, Danone came under pressure from shoppers and activists after the invasion to quit Russia as the EU and the US applied sanctions in response to Vladimir Putin’s aggression.
Danone chief executive Antoine de Saint-Affrique initially said just after the invasion that staying in Russia was the right thing to do since the group had a responsibility to “the people we feed, the farmers who provide us with milk, and the tens of thousands of people who depend on us”.
However, his position has evolved as the corporate exodus from Russia gathered pace and operating there has become more difficult. – Copyright The Financial Times Limited 2022
