Reckitt begins process ‘to’ transfer Russian business

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Reckitt The Benckiser Group has begun a process to transfer ownership of its Russian business, becoming the first major personal goods maker to do so after the country invaded Ukraine.

The maker of Durex condoms, Strepsils throat lozenges and Lysol cleaning products said its decision could include a transfer to a third party or its local employees.

“We will work closely with our colleagues in Russia on the details of the various options available to ensure an orderly process,” Reckitt said in a statement.

“We will do everything possible to ensure the continued employment of these colleagues in any new structure and we are committed to paying their monthly salaries and benefits until the end of 2022,” he added.

The announcement comes after Moscow suggested it could nationalize the assets of foreign companies leaving the country.

A Reckitt spokesperson declined to comment further.

russian division

The company, which has around 1,300 workers in Russia, continued to sell basic health and hygiene products.

Reckitt previously said he does not make money in Russia and has stopped all advertising, promotion and sponsorship in the country, as well as freezing capital investments there.

Consumer companies from Nestlé to Procter & Gamble have come under enormous pressure from consumers, employees, activist groups and politicians, including Ukrainian President Volodymyr Zelenskiy, over their presence in Russia. .

It’s the latest in a series of woes for makers of everything from cereal to soap, who are also grappling with cost inflation, falling retailer prices and supply chain disruptions.

Reckitt did not detail the financial impact of his decision. It has a factory in Russia, the country accounting for around 2% of its sales.

Camel and Lucky Strike cigarette maker British American Tobacco Plc is similarly pulling out and is in advanced talks to transfer its Russian operations to its local distributor, SNS Group of Companies. As a result, it has reduced its budget forecast for 2022.

Ukrainian War

BAT and Reckitt joining more than 600 companies that have withdrawn from Russia in one way or another since the country launched what it calls a “special military operation” in Ukraine on February 24, leaving behind assets worth hundreds of billions of dollars in total.

But the response from the consumer goods industry has been more nuanced, with many companies saying a full withdrawal could deprive ordinary Russians of essentials like baby food and medicine.

Nestle, the world’s biggest food maker, said last month it was suspending sales of the “vast majority” of its products in Russia, including KitKat chocolate bars and Nesquik drink mix.

Meanwhile, soap maker Dove Unilever will halt imports and exports to and from Russia, while detergent maker Tide P&G has halted new capital investment in the country and is only supplying essential goods.

News by Reuters, edited by ESM. For more A-Brands news, click here. Click subscribe to register ESM: European Supermarket Magazine.
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