Unilever doubles profits in Russia, but says it didn’t break earlier promises

Unilver doubled its profits in Russia over the past year, despite promises to scale down its operations there to selling only essential food and hygiene products, Follow the Money reports. The company also spent more on advertising in Russia, even though it said it would stop advertising in the country after it invaded Ukraine. Unilever said in a response that it did not break its promises.

“We are stopping all media and advertising spending. We will not invest any more capital in the country, nor will we take advantage of our presence in Russia,” Unilever CEO Alan Jope said on 8 March 2022, two weeks after Russia attacked Ukraine. He added that Unilever would keep supplying “essential food and hygiene products.”

But a year later, Unilever Russia’s profits have doubled, from 4.8 billion rubles (€56 million) in 2021 to over 9.2 billion rubles (€108 million) last year, FTM reports based on the company’s annual accounts. The higher profits also mean Unilever paid more taxes to the Russian treasury - 3.2 billion rubles (€38 million) last year, compared to 1.2 billion rubles (€14 million) in 2021.

The promise not to spend any more money on advertising and media also turned out not to be set in stone. Last year, Unilever spent 21.7 billion rubles (€259 million) on advertising in Russia, 10 percent more than in 2021. And while Jope did not specify exactly what he considered “essential food and hygiene products,” it seems iffy that Magnum and Cornetto ice creams and cosmetics can be deemed part of that. And yet they still sold well in Russia last year, according to FTM.

In February this year, Unilever issued another press release stating that the company provided over 15 million euros in aid and food to Ukraine - less than half the taxes paid to Russia.

CEO Jope did not say anything about not making profits in Russia in the new statement, but he did explain Unilever’s decision to remain in the country. “We still believe that staying is the best option, both to prevent our company from falling directly or indirectly into Russian hands and to protect our people.” The statement also dropped the word “essential” from the food and hygiene products it continues to supply, changing it to “everyday food and hygiene products.”

In response to the FTM article, a Unilever spokesperson told ANP that it did not break its promises. “Our statement that we would not benefit from our presence in Russia was related to our decision not to take money out of the country,” she said. “We can confirm that there have been no capital inflows or outflows.”

According to the spokesperson, Unilever also hasn’t advertised its brands in Russian media since the outbreak of the war. “The advertising referred to in the article was carried out by retailers or customers and was contractually committed before March 2022,” the spokesperson said.