AUCKLAND (CU)_Over the past few weeks, hundreds of multinational firms like McDonald’s, Coca-Cola and Shell announced their intention to pull out of Russia in response to Moscow’s decision to invade Ukraine. This week, a dairy giant based in Auckland revealed that it will exit its businesses in the transcontinental nation and shutting its office in Moscow.
Fonterra Co-operative Group, responsible for about 30 per cent of global dairy exports, has several well-known brands like Bega Cheese, Western Star and Perfect Italiano in its portfolio. In late-February, the company suspended shipments to Russia in the face of growing aggression in Ukraine. Now the firm has also decided to shut its office in Moscow, joining the ongoing corporate exodus from Russia.
According to Fonterra CEO Miles Hurrell, following the invasion of Ukraine, the dairy giant aimed to establish the safety of the team in Russia. “We then suspended shipment of product to Russia while we assessed the impact of economic sanctions and discussed our long-term plans with our customers and joint venture partner,” he said. “Following careful consideration of the impact on our people and our long-term plans for the Russian market, we will now close our office in Moscow, re-deploying staff where possible, and withdraw from our joint venture Unifood.”
At its office in the Russian Capital, Fonterra has seven staff members, with another 35 at its joint venture with Unifood, in Saint Petersburg. In terms of exports to the country, the co-op ships a small amount of product, butter in particular, totalling about 1 per cent of its annual exports. It is not yet clear how the firm intends to service customers in 11 countries near Russia, who were previously services from the regional headquarters in Moscow. However, given the strong demand for New Zealand dairy, Hurrell is confident the dairy giant would be able to re-allocate this product to other markets.
