Espreso. Global

Why Unilever supported Russia for so long

22 October, 2024 Tuesday
17:13

What has been going on in the mind of Unilever, a company which has supported the Russian economy against all standards of decency?

client/title.list_title

At the Moral Rating Agency, we pressured the group to get out of Russia for more than two years. The company has finally confirmed it has exited with a reported £400 million plus in its pocket, in a sale to a Russian billionaire who specialises in picking up businesses on the cheap from pressured Western sellers.

The MRA had revealed that Unilever’s business was propping up the Russian economy and treasury to the tune of half a billion pounds a year. We converted this figure into ‘war currency’ to highlight that it was enough to pay for a thermobaric rocket every nine days or an Iranian drone every 17 minutes. This is why the MRA has been shining the light on Unilever in particular.

It is good news of course. However, with Unilever, ‘every silver lining has a cloud’: huge damage has been done to Ukraine, while simultaneously the Putin dictatorship has been strengthened by a company that is sitting pretty in the democratic world. Unilever gets no medal from the MRA for dancing with the devil for two and a half years.

So, what on earth was going on in the company’s calculating mind?

On the face of it, Unilever’s decision to keep supporting the Russian economy after Putin’s invasion of Ukraine should have been a ‘no brainer’ of what not to do. The damage to its hundreds of brands from its billions of consumers should have been enough to force corrective action from day 1 of the invasion.

Indeed, the company that proved to be stubborn and greedy might have been expected to have suffered brand damage on a scale to regret. However, Unilever has been lucky: its billions of consumers didn’t all know about the company’s support for Russia and, anyway, they didn’t know all the brands the company owns. Otherwise, Unilever would have never dared do what it did.

While Unilever certainly worried about brand risk, that doesn’t of course mean the company has a moral bone in its body. Unilever doesn’t care a bean, except to count its own beans. Unilever was simply weighing up the trade-off between keeping ill-gotten profits on the one hand and protecting profits from being eroded by brand damage on the other. Make no mistake, profits were on both sides of Unilever’s deliberations.

The MRA has put a valuation on Unilever’s Russian assets at £2 billion, based on the huge profits minus future repatriation risk. Our estimate compares to the £0.4 billion reported sale price. We reconcile the gap with this formula:

Brand risk = £0.4 billion sale price - £2 billion valuation

This means that Unilever is putting a £1.6 billion negative value on the embarrassment of continuing to dance with the devil.

At the MRA, we have tried to fan Unilever’s fears in this equation by keeping the spotlight on. Post-sale, we will maintain Unilever in our ‘indelible ledger’ of companies that stayed in Russia long after the invasion.

Note that there is no moral component included in the Unilever formula, such as the downside of supporting a dictatorship or the upside of caring for the invaded people of Ukraine. It is a formula of pure greed because brand damage is money.

The situation evolved for Unilever like this. The company waited two and a half years during which the value of its Russian business declined to a level where £0.4 billion was enough to cover the shortfall between the profits it would be giving up and the brand damage to its profits. So, Unilever is paying £1.6 billion to look less bad.

Had there been fuller transparency of Unilever’s Russian complicity and the brands owned by the group, Unilever would have pulled out of Russia immediately after Putin invaded Ukraine. Despite our efforts, this continuing lack of transparency relieved some pressure on the greedy corporation.

Unilever’s exit announcement included the excuse that delays were caused by changing brands to Cyrillic typeface. Much better to have left Russia with shelves of unbranded products. The real reason was that it got enough money. The excuse was just another example of it spinning wheels and moralwashing its support for Russia, dragging it into a vortex of immorality with every spin, in a debacle we call 'Unilever-gate'.

Although Ukraine has been the principal loser, this doesn’t mean Unilever has not also suffered. The company’s global brand has certainly taken a hit and, in the end, Unilever anyway had to release the Russian business from its greedy claws. Finally, the deal is a huge loss on its pre-invasion value. So, we see that greed doesn’t pay.

Mark Dixon founded and runs the Moral Rating Agency (moralratingagency.org), which aims to get companies out of Russia, Russia out of Ukraine, Putin out of Russia, and dictatorships out of the world.

Tags:
Read also:
  • News
2024, Saturday
9 November
15:55
Exclusive
Some officials in Presidential Office realize Trump's victory means end of their career - political analyst
15:25
Pentagon sends 500 interceptor missiles to Ukraine for NASAMS and Patriot systems - media
14:56
Drone strikes at military training ground in Russia's Rostov region - Defense Express
14:25
Exclusive
Trump desperately wants Nobel Peace Prize - politician 
14:00
Updated
Ukrainian drones attack a chemical plant producing ammunition in Russia's Tula region
13:33
Exclusive
Russians end up surrounded: Ukrainian serviceman denies Russian propaganda on Kursk fighting
13:00
Review
Russian attack aftermath, Kursk battles intensify, advances near Chasiv Yar. Serhiy Zgurets' column
12:26
Russia aims to seize more Ukrainian territory before winter freeze - Estonian Intelligence
11:58
Advancing with airborne troops - analysts on Russian counteroffensive in Kursk region
11:00
Ukrainian Defense Forces eliminate over 1,600 Russian troops overnight
10:40
Russia attacks Ukraine with Shaheds, guided bombs, causing casualties in Odesa
2024, Friday
8 November
21:30
Exclusive
Freezing front line in Ukraine would be big mistake for U.S. - American publicist
21:10
Russian ballistic missiles strike critical infrastructure in Sumy, leaving two injured
20:55
Musk joined Trump's call with Zelenskyy - media
20:41
What’s behind Trump’s claim to end war in 24 hours
20:20
Ukraine, Russia exchange updated lists of prisoners of war
20:05
Exclusive
Defense Express refutes claims that Russian strategic aviation is ordered to “еxhale and relax”
19:45
Interview
Will Trump bow to Putin? This is nonsense - Polish lawmaker Kowal
19:29
War in Ukraine can be easily ended with Trump administration's approach - Erdoğan
19:10
OPINION
Putin at Valdai whines for meeting with Trump
18:50
114 combat engagements reported at Ukraine-Russia front line, 32 in Kurakhove sector
18:34
European Council extends military training mission for Ukraine by two years
18:15
Ukraine returns bodies of 563 fallen soldiers
17:56
Exclusive
Russian army advances up to 2 km daily in Donetsk sector - Ukrainian major
17:35
Russian drone strikes building in Kyiv where Estonian Ambassador lives
17:15
Xi Jinping warns Trump U.S. would "lose from confrontation" with China
16:56
Pro-Russian hackers ramp up cyberattacks after DPRK deploys troops to Russia, says Seoul
16:32
Russian Kh-69 cluster warhead missiles: new threat to Ukraine’s infrastructure
16:13
Elderly man killed, homes damaged in Russia’s latest attack on Ukraine’s Kherson
15:57
IKEA store operator Ingka Group sells last Russian asset
15:38
Russia bombs Kharkiv, Ukraine's second-largest city: civilian victims reported
15:17
Ukrainian police arrest international drug syndicate leaders, seize $20M in drugs
14:58
Review
Trump era: Kyiv Security Forum international overview
14:35
CO2 emissions in Ukraine rise by 180 million tons due to full-scale war
14:16
Exclusive
Putin's main goal is lifting sanctions — political expert
13:59
Exclusive
Russia starts using Shahed drones with thermobaric warheads — military expert Zgurets
13:39
Drones strike oil refinery in Russia’s Saratov, Ukraine allegedly behind attack
13:17
Ukraine to invite Russia to follow-up Peace Summit, but with conditions
12:58
OPINION
Zelenskyy's call with U.S. presidential election winner: dialogue with Trump is necessary
12:46
Russian forces intensify Kursk region assaults with strikes from within borders
More news