LONDON — After two years of questions and challenges from the British media, the investor community and external organizations, Unilever has sold its Russian subsidiary.
Hein Schumacher, chief executive officer of Unilever, said Thursday the Russian business has been sold to Arnest Group, a Russian manufacturer of perfume, cosmetics and household products.
“The sale includes all of Unilever’s business in Russia and its four factories in the country. Our business in Belarus is also included in the sale,” he said.
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“Over the past year, we have been carefully preparing the Unilever Russia business for a potential sale. This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic. The completion of the sale ends Unilever Russia’s presence in the country,” Schumacher added.
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The terms of the deal were not disclosed.
Pressure had been mounting on the consumer giant, parent of brands including Dove, Vaseline and Hellmann’s, to pull out of the region entirely, but Unilever always argued that any move to divest its interests would be complicated.
As reported in July 2023, Ukraine’s National Agency on Corruption Prevention added Unilever to its International Sponsors of War list, accusing the consumer giant of “contributing to [Vladimir] Putin’s war machine.”
NACP chief Oleksandr Novikov said the agency added Unilever to the list because its “hundreds of millions in tax contributions to the Russian state are helping to fund its attacks on Ukraine, and could be indirectly funding a mercenary criminal group.”
Novikov called on Schumacher, who had not yet taken up the CEO role, to make a “new start and live up to [Unilever’s] values of human rights.” At the time, he said Unilever should “leave Russia now, or history will record its complicity.”
Unilever did not respond publicly to the NACP criticism, but had earlier that year issued a statement confirming that in March 2022 it ceased all trade with Russia.
It also put an end to all media and advertising spend and capital flows into and out of the country following Putin’s invasion in February 2022.
At the same time, Unilever continued to supply everyday food and hygiene products made in Russia to people in the country.
“We understand why there are calls for Unilever to leave Russia. We also want to be clear that we are not trying to protect or manage our business in Russia. However, for companies like Unilever, which have a significant physical presence in the country, exiting is not straightforward,” the statement from 2023 said.
At the time, Unilever argued that it did not have many options in Russia. The company said closing down the business would mean the loss of around 3,000 jobs, and a chance for the Russian state to take control.
“It is clear that were we to abandon our business and brands in the country, they would be appropriated — and then operated — by the Russian state. In addition, we do not think it is right to abandon our people in Russia,” the company said.
Unilever added that selling the business could lead to “the Russian state potentially gaining further benefit,” while the third option “is to allow the business to run with the strict constraints” that Unilever put in place in March 2022.
The company said “none of these options is desirable. Nevertheless, we believe the third remains the best option, both to avoid the risk of our business ending up in the hands of the Russian state, either directly or indirectly, and to help protect our people.”