Challenged by Volodymyr Zelenskyy, Nestlé defends its business in Russia

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Nestle, the world’s largest food company, is facing growing public pressure to halt all business activities in Russia over the attack on the country Ukraine.

According to media outlets including Bloomberg News and CNN, Ukrainian President Volodymyr Zelenskyy on Saturday backed the Swiss company for remaining in Russia in a speech streamed to thousands of protesters in Bern, the capital of Switzerland.

“‘Good food, good life.’ That’s Nestle’s slogan. Your company that refuses to leave Russia. Even now – when there are threats from Russia to other European countries. Not only to us. Even when there are nuclear blackmail from Russia,” he said.

Zelenskyi’s comments echoed those of Ukraine’s Prime Minister Denys Shmyhal last week, who tweeted at Nestle CEO Mark Schneider for his company’s stance on doing business in Russia. The Swiss company halted shipments of non-essential items to Russia earlier this month, but continues to sell things like baby formula, cereal and pet food in the country.

“Unfortunately, he doesn’t understand,” Shmyhal said of Nestle’s CEO. “Paying taxes to the budget of a terrorist country means killing vulnerable children and mothers. Hopefully Nestlé will change its mind soon.”

Nestle fights back

Nestle said it makes no profit from its remaining operations in Russia. “Just because, like other food companies, we’re bringing essential food to the population, that doesn’t mean we’re just going on as we have been,” a company spokesman said in an email to CBS MoneyWatch.

“We are doing everything we can in Ukraine and neighboring countries to help alleviate this humanitarian catastrophe,” the spokesman added. “We are still one of the few active food companies in Ukraine and sometimes even manage to distribute food in Kharkiv.”

Nestle is one of a number of companies who have halted new investments and advertising in Russia but continue to sell products there, according to a list by Jeffrey Sonnenfeld, a professor of management at Yale University. Around three dozen companies have resisted calls to halt or limit their operations in Russia, according to Sonnenfeld.

MoneyWatch: The global economy is feeling the effects of Western sanctions against Russia

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Hundreds of major US and other Western companies have withdrawn from Russia since the country attacked Ukraine on February 24. American companies that will exit include Apple, Boeing, Caterpillar, Coca-Cola, Disney, Exxon, Ford, JPMorgan, MasterCard, McDonald’s, Microsoft, Nike, Visa and many others.

“There’s no middle ground here,” Sonnenfeld told CBS News earlier this month. Government sanctions “seldom come alone — they need fairly universal support from the business community to really cripple an economy as intended.”

Congress ups the heat

When asked about food companies like Cargill and ADM that still operate in Russia, the White House said it has not asked any specific companies to pull out of the country.

“We applauded those who made this decision, and they will have to make their own decisions,” press secretary Jen Psaki told reporters Monday.

Businesses could come under pressure from Congress to leave Russia. Rep. Carolyn B. Maloney introduced legislation Monday that would bar the US from buying products and services from companies that operate in Russia.

“For four weeks, the world watched in horror as Russian forces launched barbaric attacks on the peaceful and independent country of Ukraine,” the New York Democrat said in a statement.

“Given the devastating images of thousands of innocent civilians killed and injured in Ukraine — including American journalists — it is important that the United States step up pressure to weaken Russia’s ability to fund this unprovoked war,” explained Maloney. “While many companies made the right decision to end or significantly limit their operations in Russia, others failed to do so.”





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