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Tag: Unilever PLC

  • Heineken is the latest Western corporate giant to exit Russia

    Heineken is the latest Western corporate giant to exit Russia

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    Beer giant Heineken N.V. is the latest Western company to exit Russia, announcing Friday the sale of its Russian operations to Arnest Group for one euro.

    Under the terms of the deal, all of Heineken’s
    HEIA,
    +0.77%
    remaining assets, including seven breweries in Russia, will transfer to the new owners, the beer giant said in a statement. The Russian Arnest Group has also taken over responsibility for Heineken’s 1,800 employees in Russia.

    Heineken began the process of exiting Russia in March 2022, following that country’s invasion of Ukraine. The company said it expects to incur a total cumulative loss of €300 million ($324.1 million) as a result of its exit.

    “We have now completed our exit from Russia. Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia,” Heineken CEO Dolf van den Brink said in a statement. “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”

    Related: Unilever CEO vows to look at Russian operations with ‘fresh eyes’ as pressure to exit the country mounts

    A number of major Western corporations, including U.S. giants Apple Inc.
    AAPL,
    +1.26%    ,
     Alphabet Inc. 
    GOOGL,
    +0.08%

    GOOG,
    +0.21%    ,
     Amazon.com Inc.
    AMZN,
    +1.08%    ,
     International Business Machines  Corp. 
    IBM,
    +1.25%
    and McDonald’s Corp. 
    MCD,
    +0.79%    ,
    have left Russia in response to Moscow’s February 2022 invasion of Ukraine.

    Earlier this week, DP Eurasia, the master franchiser of the Domino’s Pizza Inc.
    DPZ,
    +0.49%
    brand in Turkey, Russia, Azerbaijan and Georgia, also announced its exit from Russia.

    But Heineken is “no hero,” according to Mark Dixon, the founder of the Moral Rating Agency, an organization set up after the invasion of Ukraine to examine whether companies were carrying out their promises of exiting Russia. “It failed to leave Russia for a year and a half,” he told MarketWatch via email. “The explanation that it took longer than expected doesn’t hold water, because of course it’s difficult to find a buyer if you remain so long a pariah state.”

    The Ukraine Solidarity Project said that Heineken’s move should increase the pressure on companies that remain in Russia, such as consumer-goods giant Unilever PLC
    ULVR,
    +0.44%    .
    “The point here is that major companies, like @Heineken, are and have taken loses of hundreds of millions and billions in leaving the Russian market. It is possible,” the Ukraine Solidarity Project tweeted Friday. “We’re sure @Unilever can do it, too.”

    Related: WeWork, Carl’s Jr., Unilever and Shell among companies slammed by Yale over operations in Russia

    The Ukraine Solidarity Project recently launched a high-profile campaign urging Unilever to get out of Russia, using images of Ukrainian veterans injured in the war with Russia. Last month, activists from the Ukraine Solidarity Project held up a giant poster featuring the veterans outside Unilever’s London headquarters.

    The Moral Rating Agency has also reiterated its calls for Unilever to end its Russian operations. 

    “We have always said we would keep our position in Russia under close review,” a Unilever spokesperson told MarketWatch earlier this month. The spokesperson also directed MarketWatch to a statement on the war in Ukraine that the company released in February 2023.

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  • HSBC names 9 global ‘unloved stocks’ that look cheap and could be about to surge

    HSBC names 9 global ‘unloved stocks’ that look cheap and could be about to surge

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  • Prices have not peaked yet, says CEO of one of the world’s largest consumer goods firms

    Prices have not peaked yet, says CEO of one of the world’s largest consumer goods firms

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    Unilever CEO Alan Jope photographed at the World Economic Forum in May 2022.

    Hollie Adams | Bloomberg | Getty Images

    The CEO of consumer goods giant Unilever said Tuesday that prices would likely continue to rise in the near term, adding that his firm had a playbook for high inflation thanks to its business dealings in markets like Argentina and Turkey.

    Speaking to CNBC’s Joumanna Bercetche at the World Economic Forum in Davos, Switzerland, Alan Jope talked about how his firm was managing its operations in the current climate.

    “For the last 18 months we’ve seen extraordinary input cost pressure … it runs across petrochemical derived products, agricultural derived products, energy, transport, logistics,” he said.

    “It’s been feeding through for quite some time now and we’ve been accelerating the rate of price increases that we’ve had to put into the market,” he added.

    “So far, the consumer response in terms of volume softness has been very muted, the consumer has been very resilient,” Jope said.

    “We do see the prospect of higher volume elasticity as winter energy costs hit, as households’ savings levels come down and that buffer goes away and as prices continue to rise,” he said.

    Last October, Unilever published its third-quarter results for 2022, with the firm reporting price growth of 12.5%.  

    Jope was asked if he foresaw any moderation when it came to inflationary pressures. “It’s very hard to predict the future of commodity markets,” he replied.

    “Even if you press the oil major CEOs, they’ll be a little cagey on giving an outlook on energy prices.”

    Unilever’s view, he said, was that “we know for sure there’s more inflationary pressure coming through in our input costs.”

    “We might be, at the moment, around peak inflation, but probably not peak prices,” he went on to state.

    “There’s further pricing to come through, but the rate of price increases is probably peaking around now.”

    Stock picks and investing trends from CNBC Pro:

    Unilever has a global footprint and owns brands including Ben & Jerry’s, Magnum and Wall’s.

    During his interview with CNBC, Jope touched upon the international dimension of his business and how the experience of operating in a range of markets was steering it through the current climate.  

    “Nobody running a business at the moment has really lived through global inflation, it’s a long time since we’ve had global inflation,” he said.

    “But we’re used to high levels of inflation from doing business in places like Argentina, or Turkey, or parts of Southeast Asia,” he added.

    “So we do have a playbook, and the playbook is that it’s important to protect the shape of the P&L by landing price.”

    “And so it’s not that we’ve taken more price, we just started acting earlier than many of our peers, and the guidance that we’ve been getting from our investors is they support that and feel that that’s an appropriate action.”  

    This, Jope explained, was “something we have learned from being in these high inflationary markets, though … much of that inflation is currency weakness, historically.”

    “But now those markets are having to deal with the combination of commodity pressure and currency weakness. So our instinct is to act quickly when costs start coming through.”

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