Danone lost control of its Russian branch. We managed to reach an agreement with you

Danone lost control of its Russian branch.  We managed to reach an agreement with you

Seven months after Russia's aggression against Ukraine, Danone announced its intention to exit the Russian market. He didn't make it in time because the management of the company and other foreign entities was taken over by Russian institutions. This was based on President Putin's decree, which violates international trade law principles. Despite the difficulties, Danone announced that it would finally close its operations in Russia.

Most foreign companies that declared their intention to exit the Russian market did so in 2022. Seeing the pace at which foreign capital is leaving Russia, the country's authorities have introduced regulations that are inconsistent with international trade rules and give Russian entities the right to manage companies that have declared their willingness to terminate their operations in Russia.

Russia took control of foreign companies

In July 2023, we reported that the government property management agency Rosimushchestvo had taken over “temporary management” of Danone Russia and Baltika Breweries. This happened just a few days after President Vladimir Putin signed a decree allowing the takeover of foreign businesses from “unfriendly countries”, i.e. all those that imposed sanctions on Russia after February 2022. Similar takeovers had already taken place earlier, i.e. before the decree was signed. In April 2023, the German Uniper and the Finnish energy company Fortum lost the right to manage their assets.

The loss of management rights made it difficult for Danone to terminate its Russian operations for several months. However, everything was finalized and Danone announced that it had all consents to sell its food business in Russia to Vamin R LLC.

Danone is leaving Russia

It should be added that even apart from the president's decree, Danone was in no hurry to announce plans to leave Russia – it did so only seven months after the outbreak of the war.

The Russian market was important for Danone: before the war, the company had 18 plants in the country, employing over 10,000 people. employees. At that time, it remained the leader in the production of dairy products in Russia. In 2022, Danone generated revenues of USD 3 billion on the Russian market.

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