Unilever sells Russian unit to local tycoon after years of pressure

Unilever has sold its Russian subsidiary to a local manufacturing group for a reported €520 million after repeated criticism for not ditching operations in the country after its invasion of Ukraine.
The London-listed consumer group, which has been branded a “sponsor of war” for not exiting Russia sooner, said it had reached an agreement to sell Unilever Rus to Arnest, a Russian manufacturer of cosmetics, perfumes and household products.
The sale includes all of Unilever’s business in Russia and its four factories in the country, as well as the group’s interests in Belarus. The Russian arm, which employs about 3,000 people, owns the local rights to brands ranging from Dove soap to Domestos disinfectant.
Arnest is owned by Alexey Sagal, a Russian businessman and a major beneficiary of western companies’ exodus from Russia. Last year he snapped up Heineken’s Russian business, including seven breweries and 1,800 employees, for just €1.
Hein Schumacher, the boss of Unilever, said on Thursday that the company had “been carefully preparing the Unilever Russia business for a potential sale” over the past year. “This work has been very complex, and has involved separating IT platforms and supply chains, as well as migrating brands to Cyrillic.”
He added: “The completion of the sale ends Unilever Russia’s presence in the country.”
The move comes almost three years after Russia’s invasion of Ukraine in February 2022. Since then the maker of Marmite spread, Magnum ice cream and Hellmann’s mayonnaise has faced repeated calls from campaigners and politicians to exit the country.
Sir Chris Bryant, the senior Labour MP, said the “idea of Unilever making money out of selling Magnums to Russians, as essential items apparently — it angers me beyond belief”.
Ukraine’s government called Unilever a “sponsor” of the war after the company paid 3.2 billion roubles (about £27 million) in corporate taxes in Russia in 2022.Oleh Simoroz, a Ukrainian soldier injured in the war, had also urged the consumer goods group to stop doing business in Russia, complaining that “you’re paying taxes to the aggressor country and thus financing terrorism”.
Schumacher had argued that trading in the region remained the “best option” to avoid the risk of its business ending up in the hands of the Russian state, “either directly or indirectly, and to help protect our people”. The Unilever boss has also said previously that pulling out “could result in it being nationalised”, pointing to the takeover of the Russian subsidiary of Danone, the French yoghurt maker.
In September, The Moral Rating Agency, which highlights corporations’ ties with Russia, said Unilever should not be applauded over reports that it was due to sell its Russian assets to the Arnest group.
The agency said: “It is interesting that a payment of half a billion dollars might help it do the moral thing. While an exit would be good news, we should never forget that Unilever has been supporting the Russian economy at the rate of half a billion pounds a year, which is enough to pay for a thermobaric rocket every nine days or an Iranian drone every 17 minutes.”
Schumacher said in July that the conglomerate had “substantially” localised its operations in Russia over the past year and that its main objective was to minimise economic contributions to the Russian state.
In March 2022 Unilever became the first big European food company to stop imports into and exports out of Russia.
A full exit from Russia is one of the most important decisions taken by Schumacher so far, who in his first year in charge has overseen plans to spin off its ice cream business, lay off as many as 7,500 staff, and focus on 30 key brands to reverse years of under-performance.