Nestlé still sells in Russia - despite the company's promises (2024)

Anyone visiting supermarkets in Russia would find it hard to believe that foreign brands have left the country in large numbers, despite company proclamations. The shelves are full, the selection is large.

Well-known products from the Swiss consumer goods company Nestlé stand out too. Nescafé, a very popular product in Russia, is still available in many varieties.

The same applies to Bystrow brand breakfast cereals, Maggi soups and bouillon cubes, Purina pet food, pralines and chocolate bars. These Nestlé products can be found in different varieties in the racks, along with baby and children's food. As the labels reveal, the products were produced in Russian Nestlé factories.

Mövenpick ice cream can also be found in the freezers, albeit under the new brand name Monterra. Even imported Perrier water is for sale at the Perekrjostok supermarket chain, for instance, the range of which is comparable to Migros in Switzerland or REWE in Germany.

«We have implemented the measures»

Supermarket shelves full of Nestlé products – this is in contrast with the company's official announcements. After the start of the Ukraine war, Nestlé came under international pressure. In a campaign on social media, the Ukrainian government accused the company of being a «sponsor of Putin's war».

In response, the world's largest food company announced at the end of March 2022 that it would «drastically reduce» its supply in Russia. Nestlé's corporate website now states: «We have implemented the measures announced in March.» A spokesperson for the company confirmed this on request.

Various measures are mentioned specifically. «We have suspended production of the large majority of varieties of renowned Nestlé brands [in Russia] to focus on providing essential foods, such as infant food and medical nutrition.» According to the company, Nestlé is thus living up to its own claim to guarantee the basic human right to food.

In addition, the company explains that it has stopped the export of all «non-essential» products to Russia – for instance, the supply of Nespresso capsules, which are manufactured in Switzerland. The company also claims to have stopped advertising in Russia and is currently not making any new investments. Nestlé further states that any profit from the remaining Russian business will be donated to humanitarian causes.

What is «essential?»

How can these explanations be reconciled with the fact that a large number of Nestlé products continue to be available in Russia? The NZZ confronted Nestlé with questions about its Russian business for this article. The company declined to comment.

One possibility, however, is that Nestlé is interpreting the term «essential food» more broadly than it is generally understood. Thus, for the company, not only vital products such as infant formula, but also Nescafé, breakfast cereals, Maggi cubes or pet food could count as «goods of daily use.» Only imported luxury products such as Nespresso would then be excluded from this definition.

In the food industry, the issue is handled in various ways. Some Western food manufacturers, such as Mars or Mondelez, are deliberately carrying on as before in Russia. The head of Mondelez International, for instance, said that they deliver chocolate and cookies to «ordinary consumers in Russia». It can in fact be argued that the Russian population should not be lumped in with the regime. In contrast, other chocolate manufacturers such as the Swiss Lindt & Sprüngli Group have withdrawn from Russia completely.

Factories continue to run

The issue of definition is of great importance. A broad understanding of «essential foods» would mean that Nestlé could maintain much of its current production in Russia. This would actually match the situation in the country itself – not only in the supermarkets.

There are also no reports to prove that local Nestlé factories have stopped production. All that is known is that the company has suspended individual animal food products due to bottlenecks in logistics and the availability of raw materials. In addition, a planned plant in Siberia fell under an announced investment freeze in the fall.

Before the war, Nestlé operated seven factories in the country. In Timashevsk in southern Russia, for instance, the company manufactures Nescafé products. A plant near Moscow takes care of the production of Purina pet food. In Perm close to the Urals, Cereal Partners Worldwide, a joint venture between Nestlé and the American General Mills, manufactures breakfast cereals. In Samara on the Volga River, the traditional Rossiya chocolate factory belongs to Nestlé. In total, the Swiss company employed around 7,000 people in Russia in 2021.

Search for new staff

There are no reports of major rounds of layoffs. On the contrary, Nestlé's Russian subsidiary seems to be continuing to recruit staff. On «Headhunter.ru», one of the most important online job portals in the country, Nestlé Russia currently is currently advertising around 110 jobs. The company is looking for engineers in Timashevsk or project managers in the Moscow headquarters.

A personnel change has also recently taken place at the top of the company. According to a report in the newspaper Kommersant, which has been confirmed by Nestlé Russia, a new general director for Russia and Eurasia based in Moscow has been appointed in January. For the first time, a Russian has taken over the management of Nestlé's Russian subsidiary. The Frenchman who had previously held the position has apparently left the country.

Nespresso enters the country via detours

While production of Nescafé or Purina products apparently continues in Russia, the case of imported goods is different. Nestlé is likely to have kept its promise to stop supplying Nespresso capsules directly from Switzerland to Russia, for instance. The Nespresso stores, too, were abandoned.

However, this does not mean that people are no longer able to buy Nespresso capsules in Russia. On online portals such as Wildberries.ru, they are easily available. It is likely that these goods are delivered to Russia by intermediaries via detours, possibly through Turkey or Serbia. One indication of this is that capsules now cost twice as much today as they did before 2022.

Gray market imports often escape the control of manufacturers. The Swiss chocolate company Lindt & Sprüngli, for instance, is also facing the problem that certain products are still available in Russia, even though the company has abandoned its stores in the country and no longer supplies Russia. The Russian government had legalized parallel or gray market imports last year.

Hesitant withdrawal of Western companies

The Nestlé's example suggests that Western companies are probably less determined to withdraw from Russia than they were a year ago.

A recent study by the University of St. Gallen and IMD Lausanne, for instance, has shown that of around 1,400 companies from the EU and G-7 countries, just under 9% had completely divested from their Russian subsidiaries. This is also due to the regulatory hurdles that the Russian government has put in place for foreign companies wishing to leave the Russian market following the imposition of economic sanctions by the West.

Databases set up by The Yale School of Management or Kyiv School of Economics also suggest that Western companies are still active in Russia. There are currently 43 Swiss-based companies on the Yale list. Only 20% of them have already withdrawn from Russia completely. One example is the retail group Coop, which sold its Transgourmet wholesale business in Russia to local management. Another 60% of Swiss companies have temporarily suspended or significantly reduced their business in Russia.

Nestlé can be found in the «buying time» category on the Yale list. These are companies that are postponing investments but are continuing to do substantial business in Russia. A look at the Russian store shelves confirms this.

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