Paulig on Monday said it is withdrawing from Russia, leaving behind a 200-employee coffee roasting factory in Tver, a city located about 180 kilometres north of Moscow. (Markku Ulander – Lehtikuva)


UNITED RUSSIA, the largest political party in the State Duma, is proposing that the Kremlin expropriate the functions of companies pulling out of Russia due to the war in Ukraine and the sanctions levied against Russia, reports Helsingin Sanomat.

Andrey Turtshak, the secretary of the general council of United Russia, pointed specifically to three Finnish companies in the proposal on Monday: Fazer, Paulig and Valio.

The Kremlin, he argued, should take firm retaliatory action and consider expropriating the functions of companies withdrawing from the market as a means to protect local employees and the national production potential.

“The decisions have been strictly political in all cases. Their cost is a high number of Russian employees being laid off overnight,” stated Turtshak. “[Expropriation] is an extreme measure, but we will not tolerate back-stabbing.”

Fazer on Monday announced it is discontinuing the operations of its three bakeries in St. Petersburg and one in Moscow. The bakeries have provided employment to roughly 2,300 people and generated around 157 million euros in revenue, about 13 per cent of the overall revenue of the food industry company.

“We see no other solution than to exit Russia. Russia’s attack on Ukraine is an act of aggression which has tragic consequences across the region,” said Christoph Vitzthum, the CEO of Fazer.

Paulig similarly stated that it is withdrawing from Russia, leaving behind a 200-employee coffee roasting factory in Tver, a city located some 180 kilometres north of Moscow. Russia and the countries surrounding it have accounted for about five per cent of the net sales of the Finnish coffee producer.

The process, it assured, will be planned in a way that takes into consideration its customers, employees and the legislation in Russia.

Also Valio declared that it will close its business in Russia on Monday. The Finnish dairy giant has a processed cheese factory outside Moscow and contract manufacturing partners and sales offices in Moscow and St. Petersburg. Its Russian operations have provided employment to about 400 people and generated annual sales of 85 million euros.

“We strictly condemn Russia’s attack on independent Ukraine. Ethically, Valio cannot continue operations in Russia,” stated Annika Hurme, the CEO of Valio.

President Vladimir Putin’s invasion of Ukraine has triggered an unprecedented corporate exodus from Russia. On Tuesday, the list of companies pulling back from or pausing their operations in the country grew to include the likes of Coca Cola, Levi Strauss, McDonald’s, Pepsi and Starbucks.

The withdrawals may result in the redundancies of hundreds of thousands of people.

Andrey Belousov, the first deputy prime minister of Russia, on Friday stated that a company ceasing its operations and laying off personnel in the country will be ruled to have performed deliberate bankruptcy, an act that entails administrative and possibly criminal liability under Russian insolvency laws.

Companies, he added, can also continue their operations or temporarily hand over their shareholdings to Russian partners.

Aleksi Teivainen – HT