The successful Russian branch of the Oreo cookie manufacturer Mondelez has appointed new management, according to two confidential company memos obtained by Reuters that provide new information about a corporate reorganisation in Europe.

The Chicago-based Mondelez company halted advertising in Russia after months of boycotts and pressure from activists and shareholders to do so, but the company has not succeeded in leaving the nation completely.

Vince Gruber, president of Europe, told staff in an internal document obtained by Reuters that a new general manager had been appointed to oversee the company’s Russia operations, which he called a “standalone organisation.”

However, the memo stated that in his new position, the general manager for Russia answers to a different executive who answers to Gruber.

Critics of Mondelez might not be appeased by the arrangement. Despite calls from investors and boycotts for the company to stop selling its goods—including Milka chocolate—it has three factories in Russia and has persisted in doing so.

“In the law we use the expression ‘a distinction without a difference.’ This is an attempted workaround that is not very meaningful,” said Nell Minow, a corporate governance expert and vice chair of ValueEdge Advisors. “There are certain kinds of business connections where you see a justification, if it has to do with health, urgently needed supplies. These are cookies and there really is no excuse.”

Mondelez stated on Friday in response to inquiries from Reuters that “effective at year-end 2023, we have stood up our local business to operate more independently.”

It stated that “Products sold in Russia are now produced and distributed locally, with no imports of finished goods from Europe into Russia or exports from Russia into Europe.”
Tuesday in Boca Raton, Florida, is Mondelez’s presentation day at the Consumer Analyst Group of New York conference.

Following Russia’s invasion of neighbouring Ukraine in 2022, McDonald’s, Starbucks, and numerous other international corporations withdrew, writing off billions of dollars’ worth of assets.

Rivals of Mondelez, such as Nestle, the maker of Maggi, are still active in Russia. There are no international sanctions pertaining to food.

The company stated in its annual report, which was made public in February, that the conflict in Ukraine poses a risk to its operations and could result in fatalities, physical harm, and property damages.

“We might also face questions or negative scrutiny from stakeholders about our operations in Russia despite our role as a food company and our public statements about Ukraine and Russia,” Mondelez stated in its most recent annual report.

Providing “shelf-stable products that are daily staples for ordinary people,” Mondelez said in a statement released to the press last year that its activities in Russia “would mean cutting off part of the food supply for many families who have no say in the war.”

In a single message to employees on January 31, Mondelez executive Gruber said that the business was going to divide the European region into 14 “commercial units,” each of which would be in charge of a smaller region or a single country. Staff was notified via a different message from Gruber on February 13 that Alexey Blinov will take over as the new general manager for Russia. According to LinkedIn, Blinov works for Mondelez as a finance executive with a base in Moscow.

The company’s largest market by sales is Europe, where consumers enjoy Mondelez’s Milka and Cadbury chocolate, but it has had price increases disputes with merchants in that region.

After Russia invaded Ukraine, Mondelez announced that it was reducing its operations there and concentrating on “basic offerings,” but it was still under pressure from its staff to leave the country.

Following a Ukrainian agency’s designation of Mondelez as a “international sponsor of war,” a business boycott of the corporation erupted in the Nordic region last year.

In June of last year, Mondelez announced that it would be “stand-alone, opens new tab with a self-sufficient supply chain before the end of the year”; however, it did not offer any further information.

The corporation stated in its annual report, which was made public earlier this month, that its operations in Russia are now more profitable than they have ever been.

According to a person acquainted with the organisation, Mondelez executives in Moscow oversaw the company’s activities in Ukraine before to the conflict. The source stated that following Russia’s invasion of Ukraine in February 2022, its company in Ukraine was taken out of Moscow’s jurisdiction.

(Adapted from Reuters.com)

Categories: Economy & Finance, HR & Organization, Strategy, Uncategorized