Mondelez International, the American confectionery giant behind Cadbury and Oreo, has defended its continued presence in Russia against a rising tide of shareholder activism in the United Kingdom.
At the company’s annual general meeting in Chicago on Wednesday, chief executive Dirk Van de Put reiterated the firm’s position that exiting Russia would be “irresponsible” towards local employees and consumers. “We are not funding the war,” he told shareholders. “Our business is focused on basic food products.”
Mondelez has faced persistent criticism since Russia’s full-scale invasion of Ukraine in February 2022. While many Western multinationals withdrew or suspended operations, Mondelez maintained production and sales, arguing that international food companies have a moral obligation to stay. The company says it has scaled back non-essential investment and donated profits from Russia to humanitarian relief.
But UK institutional investors, including the Church of England Pensions Board and Legal & General Investment Management, have intensified pressure. They argue that continued operations generate tax revenue for the Kremlin and undermine sanctions regimes. “Every rouble of profit that Mondelez makes in Russia ultimately flows to a government waging an illegal war,” said Adam Matthews, director of ethics and engagement for the Church pension fund.
The investment groups, controlling combined assets of more than £450 billion, have filed a shareholder resolution demanding an independent review of Mondelez’s human rights due diligence in Russia. The vote is scheduled for next month and is likely to expose deep divisions between European and American investors.
Mondelez’s stance places it in a shrinking minority of Western food companies still active in Russia. Nestlé has curtailed operations but not fully exited. PepsiCo and Coca-Cola have ceased production and sales of many brands. Mars and Unilever have also reduced their footprint. The Ukrainian government has placed Mondelez on its list of “international sponsors of war”, a designation the company rejects.
Yuriy Vasylyk, Ukraine’s deputy minister of economy, said: “Mondelez’s decision to prioritise profits over principle is a stain on its corporate reputation. We urge all investors to reconsider their support.”
Mondelez reported $800 million in revenue from Russia last year, roughly 3.5 per cent of global sales. The company insists it complies with all sanctions and pays no dividends to the Russian state. It also notes that it employs 4,500 people in Russia and sources most of its ingredients locally.
“Leaving would simply hand our factories to local competitors or the state,” Van de Put said. “That does nothing to help Ukraine.”
The shareholder rebellion is the most significant challenge yet to Mondelez’s Russia strategy. If the resolution passes, it would force the board to commission an external audit of its operations and expose the company to further legal and reputational risks.
Legal & General said in a statement that it had “serious concerns that the company’s continued presence in Russia exposes it to material financial, regulatory and reputational harm.”
The outcome of the vote will be closely watched by investors and human rights groups as a bellwether for corporate accountability in conflict zones.
