(Bloomberg) -- Nestle SA, the world's largest food maker, said it's suspending the vast majority of its manufacturing in Russia amid growing pressure on multinationals to fully exit the country following its invasion of Ukraine.
The Swiss company is stopping the sale of brands like KitKat and Nesquik and will focus on essential foods including baby food and medical nutrition, it said in an emailed statement Wednesday. The company is in the process of identifying solutions for its factories and employees in Russia, who will continue to be paid, a spokesperson said, adding the move means Nestle will suspend most of its pre-war sales volume and production volume in Russia.
“As the war rages in Ukraine, our activities in Russia will focus on providing essential food, such as infant food and medical/hospital nutrition — not on making a profit,” Nestle said in the statement. “This approach is in line with our purpose and values. It upholds the principle of ensuring the basic right to food.”
Shares in Nestle were down 1.3% early Wednesday afternoon.
Ukrainian President Volodymyr Zelenskiy criticized Nestle for still conducting business in Russia in a streamed speech to thousands of protesters in Switzerland's capital of Bern on Saturday. Last week, Ukrainian Prime Minister Denys Shmyhal sent a tweet saying Chief Executive Officer Mark Schneider has shown no understanding and that he hoped he would soon change his mind.
Nestle has been gradually reducing its footprint in Russia since the war began, first halting advertising and capital investments, and then earlier this month stopping shipments of non-essential products like Nespresso coffee capsules and San Pellegrino water. It has kept selling baby food, cereals and some pet food, but said it doesn't make a profit from its remaining activities in Russia.
“While we do not expect to make a profit in the country or pay any related taxes for the foreseeable future in Russia, any profit will be donated to humanitarian relief organizations,” the company said.
Nestle has more than 7,000 employees and six factories in Russia, where products like confectionery and coffee are made, and generated about 2% of total revenue there last year.
Nestle is not the only food company that has maintained some business operations in Russia. British rivals including Unilever Plc, and Reckitt Benckiser Group Plc, as well as U.S. competitors such as Kellogg Co. and PepsiCo Inc. are still supplying some essential food and drink to Russian consumers.
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