Unilever has been named an ‘international sponsor of war’ by the Ukrainian government.
Ukraine's National Agency on Corruption Prevention (NAPC) called out the personal care giant for continuing its operations in Russia as the Russia-Ukraine war continues, alleging its profits had doubled over the past year.
"After Russia's full scale invasion of Ukraine, the company promised to suspend all imports and exports of its products to and from Russia, as well as halt all media and advertising spending," NAPC said in a statement.
"However, a year later, Unilever Russia's profits doubled from 4.8bn rubles (US$80m) in 2021 to more than 9.2bn rubles ($153m) last year.
“In addition, thanks to the significant amount of profit obtained... [Unilever Russia] managed to increase the capital to 34.5bn rubles in 2022 from 25.3bn rubles in 2021."
This news comes after the beauty conglomerate, which owns Dove, Lifebuoy and Lux, has become subject to a new law in Russia which obliges all large companies operating in the country to contribute directly to its war effort.
After being publicly named, protests took place outside Unilever’s London headquarters yesterday (4 July) calling on CEO Hein Schumacher to withdraw the company from Russia.
Activist Group The Ukraine Solidarity Project (USP) erected a billboard outside Unilever’s London building featuring pictures of wounded Ukrainian soldiers posing in the style of a Dove advert with the slogan, ‘Helping to fund Russia’s war in Ukraine’.
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Valeriia Voshchevska, a spokesperson for USP, said: “Unilever is contributing hundreds of millions in tax revenues to a state which is killing civilians and funding a mercenary group about to be designated a terrorist organisation in the UK.
“It risks its staff and resources being mobilised into Vladimir Putin’s [President of Russia] machine.
“Some of the world’s biggest companies have already left Russia.
“It is possible – after 16 months of war – that the time for excuses has passed.”
The Moral Rating Agency has also accused Unilever of contributing £580m to the Russian treasury and economy annually.
Equalling £1.6m per day, the campaign group said this is the equivalent cost of 46 bullets per second being fired for 24 hours a day, 365 days a year.
What is Unilever’s position?
Unilever has defended its decision to stay in Russia during the war, yesterday referring the BBC to its statement made back in February.
"We understand why there are calls for Unilever to leave Russia,” read the company statement.
"We also want to be clear that we are not trying to protect or manage our business in Russia.
“However, for companies like Unilever, which have a significant physical presence in the country, exiting is not straightforward."
The consumer giant currently employs around 3,000 people in Russia across four manufacturing plants and one head office.
It said that if it were to abandon its brands in Russia, "they would be appropriated – and then operated – by the Russian state.”
Unilever said it had not been able to find a way to sell the business that “avoids the Russian state potentially gaining further benefit, and which safeguards our people”.
The group said continuing to run the business with “strict constraints” was the best option.
Unilever claims to be selling only "essential" products in the country, including everyday food and hygiene products.
It added that it would continue to keep its position under close review.
This is not the first time Unilever has faced backlash over its decision to continue doing business in Russia, following its invasion of Ukraine.
Earlier this year, analysts spotted in Unilever’s Q4 and full-year 2022 results that the business had an asset position of €900m in Russia and that business in the country had contributed to 1.4% of turnover and 2% of the group’s net profit.
The personal care giant said the new Ukrainian factory supports its long term commitment to the country and will create more than 100 jobs in the region.
US consumer goods group Procter & Gamble (P&G) was also named an ‘international sponsor of war’ by the Ukrainian government.
NAPC said P&G has been targeted because the taxes it pays to the Russian budget have increased, despite a statement about it scaling back its presence in Russia.
Many big multinational brands have cut ties with Russia since the invasion of Ukraine, including McDonald's, Coca-Cola, Starbucks and Heineken.
Cosmetics Business has reached out to Unilever for comment.