The world’s biggest snack company is in trouble after it came under fire for its continued involvement in Russia. Mondelez owns, among other things, Freia. The original Norwegian chocolate producer, which has marketed itself as “a little piece of Norway”. Temperatures quickly rise when parent company Mondelez has chosen to stay in Russia, despite the country’s war of aggression against Ukraine. Well-known players such as SAS, Norwegian, Hurtigruten, the Norwegian Tourist Association, Strawberry, and the Norwegian Football Association have all chosen to boycott Mondelez and thus also Freia. A question that drowns a little in the debate, however, is perhaps the most important: Why is Mondelez back in Russia at all? If you stay in the country, you are either directly or indirectly helping to finance Putin’s war machine. You help keep the economy going by employing people, paying taxes and buying goods from local suppliers. Packed with dilemmas, news met Chris Callanan, the CEO of Mondelez Norway and Denmark, on Monday. He believes that withdrawing from Russia is more difficult than it sounds. Among other things, he points out that it is difficult to know what will happen to the factories, the recipes and the machinery. Freia Norway CEO Chris Callanan. Photo: Christian Ziegler Remme He also highlights the company’s 3,000 employees in Russia who must be taken care of, in addition to the 10,000 farms they have agreements with that make “ordinary goods for ordinary people”. But this can quickly be seen as empty explanations when you look at what others have done – or tried to do. A great many companies with production and factories in Russia have nevertheless left the country, even though there are demanding trade-offs that have to be made. The Danish brewing giant Carlsberg announced its plan to leave Russia as early as March 2022. But it was difficult to clarify how the sanctions worked, and not least; to find a suitable buyer. Now, just over a year later, they are finally almost there. The car manufacturer Renault sold its factories last summer, which cost them 2.2 billion euros. The new Russian owner now manufactures Russian cars, with parts imported from China. Must hand over assets to Russia The latter illustrates what these companies stand for: According to the New York Times newspaper, Western business leaders often say that they have a responsibility to shareholders to find buyers who can provide a certain value for assets worth billions, instead of principle give them to Russia. It was such concerns that led tobacco giant Philip Morris to say earlier this year that it may never sell its Russian operations. Still others do not want to risk giving their market shares to companies from China, Turkey, India or Latin America, i.e. countries that do not support the sanctions. These companies are ready to take over cheap leftovers after the Western companies leave. Risking prosecution The French grocery giant Auchan also gives an interesting insight into how difficult it is. The company has insisted, according to the New York Times, that it was necessary to keep its stores open in Russia, to offer food to its Russian customers and to continue employing 29,000 workers. The French grocery chain Auchan. Photo: PHILIPPE HUGUEN / Afp Closing the business would have been seen as bankruptcy by the Russian authorities. It could lead to the prosecution of local bosses, and the seizure of hundreds of supermarkets and 20 years of investment. The pharmaceutical giant Pfizer has chosen to maintain the supply of medicines to Russia, where the surplus from the sale will go directly to humanitarian aid to Ukraine. The list of trade-offs and dilemmas that the companies face is therefore long. It is nevertheless the case that some of these companies are cynical, and use these dilemmas for what they are worth in their communication with the public. Of course, commercial enterprises want it to be as financially painful as possible. And some will stay in Russia because it is profitable. Why us? As for Freia, it is easy to understand the frustration of the employees there. Why is it that they are the only ones being punished? What about all other manufacturers of something or other, who have connections to Russia? Why are they not punished? For example, Elkjøp chooses to sell products from Chinese Xiaomi, which is on exactly the same blacklist as Mondelez. And what about our own oil fund, which owns many billions of shares in Mondelez? In terms of kroner and øre, this currently means little to Freia. The boycott is currently limited to hotels and airlines, and the chocolate bars sold in minibars and on flights are vanishingly small compared to the volumes they have at the three major grocery players Coop, Norgesgruppen and Rema. Need moral help The grocery chains have called for moral help from the government. They would prefer to have a clear “yes” or “no” to whether they are going to boycott or not. But neither Freia nor Mondelez is on the list of companies sanctioned by the EU and Norway, and thus no sanctions have been introduced against Freia and Mondelez either. Therefore, the Norwegian Ministry of Foreign Affairs believes that it should be up to the individual company and organization to make their own ethical assessments for themselves, and make independent choices about what they will buy and who they will trade with. And that is why Norgesgruppen, Coop, Rema and Oda have both chosen not to boycott Freia. It is not difficult to understand that the government is reluctant in this matter. On the one hand, a full boycott of Freia could help push the owner out of Russia. On the other hand, Freia is such a small part of Mondelez’s portfolio that you risk ending up only harming the company and the employees.
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A small piece of Russia – Statement
