Barry Callebaut suspends capital investment in Russia, responding to Ukrainian conflict
The Barry Callebaut ISM stand in 2020 (pic Barry Callebaut)
Barry Callebaut has confirmed that it is to suspend its capital investments in Russia in the wake of ongoing conflict with Ukraine, reports Neill Barston.
The major global cocoa and chocolate business said that it had been ‘profoundly impacted’ by developments in the past few weeks, with many of its colleagues contributing towards humanitarian aid surrounding the crisis.
As previously reported by Confectionery Production, key businesses operating with the confectionery sector have confirmed a varying range of actions in response to the situation. For its part, Nestlé confirmed this week that it would suspend advertising, as well as sales for a number of its major products including KitKat in Russia – with the brand having formed a strong association with Barry Callebaut for its ruby variety.
Other major companies including Mars, Mondelez and Cargill have all pledged to scale back activities in the region, though some observers, as well as the president of Ukraine, have called upon corporations to go even further in entirely withdrawing from Russia to ensure taxes are not paid to its government.
Consequently, a series of major financial sanctions have been placed on Moscow, impacting on its central banks, as well as its elite billionaires who have been personally singled out for penalties as a direct response to the invasion of neighbouring Ukraine last month, which shows no sign of drawing to a close. The UN, as well as the vast majority of world leaders have called for a swift peaceful resolution to the situation, that has seen 10 million Ukrainians displaced from their homes.
As for Barry Callebaut, as Confectionery Production has reported, the business recently opened its third confectionery manufacturing facility in Russia, at Kaliningrad which employed around 40 people serving the region. The business also operates facilities at Chekhov, in the Moscow region, and another in Kasimov, within Ryazan. These will continue to operate, with the business asserting these are operating as part of daily food supply chains.
The business also operates a branch of one of its Chocolate Academies in Moscow, offering training to chocolatiers, which is also understood to still be continuing to operate.
Speaking on the situation, Barry Callebaut told Confectionery Production: “We are profoundly impacted by the images of people having to leave behind their homes, families, and friends due to the military attack on Ukraine. Many of our colleagues have family and friends in Ukraine, and their stories are hitting very hard. Our company, and many of our colleagues, are supporting organisations addressing the humanitarian needs of all people affected by the conflict, inside and outside of Ukraine.
“We have three factories in Russia which are mainly producing for the local Russian market. We have no direct presence in Ukraine.
“At this moment we continue our operations in Russia. Our primary focus today is to continue to supply food products, and chocolate is part of the daily diet for many, and to support our people and their families. We have suspended new capital investments and will continue to monitor closely and assess the situation as circumstances evolve.”
Industry under pressure to respond
The past few weeks has seen the industry come under pressure to respond to the situation, as major brands including Coca-Cola, Procter and Gamble, as well as Unilever reportedly all scaling back operations in the country.
Another major player in the cocoa sector, Cargill, has also faced pressure from protest groups such as Mighty Earth, which has claimed that the business should set an example by exiting Russia entirely.
In response, the company issued a statement: “The people of Ukraine are living an unthinkable and horrifying reality. Since their country was invaded, many have lost their lives, their families, their homes – everything. Through our 157 years, two things are a constant: We always put people first, prioritising our employees’ safety, and we do everything we can to nourish the world. This is how we feed families and sustain life around the globe.
Our purpose and principles have been with us since our beginning and guide us every day. We have a long history in Russia, but now is a time like no other. As such, we are scaling back our business activities there and have stopped investment.”