Unilever to Keep Making Russian Ice Cream After Split

(Bloomberg) — Unilever Plc will keep making Cornetto and Carte D’Or in Russia even after shedding its global ice cream unit.

The soap-to-stock-cube conglomerate said in March it will spin off or sell its sluggish ice cream business, which generated around €8 billion ($8.7 billion) in sales last year, as part of a wider overhaul of the group. 

However, its ice-cream division in Russia won’t form part of that process as it is ring-fenced from the rest of the business, a spokesperson said Thursday.

Unilever has been under pressure to leave Russia in the wake of the country’s full-scale invasion of Ukraine, now in its third year. Instead, under former Chief Executive Officer Alan Jope and now his successor Hein Schumacher, it has stopped advertising there and halted Russian exports and imports of its products.

Unilever as a whole has net assets of around €600 million in Russia, including four factories.

Inmarko

Most of the company’s ice cream production in Russia is carried out by Inmarko, which Unilever acquired in 2008. The unit makes Magnat, the Russian equivalent of Magnum, and a Twister-like product called Max, as well as a range of Soviet-style ice creams under the Golden Standard line. In 2007 it had annual sales of €115 million and then Chief Executive Officer Paul Polman said it “filled an important gap in a critical market.”

Companies like Unilever condemned Russia’s invasion but finding buyers for the assets of “unfriendly countries” is challenging and incurs a large exit tax. Mondelez, Nestle and Procter & Gamble are among the Western multinationals that have maintained large operations in Russia. Some of them have argued that leaving is tantamount to handing over their assets to President Vladimir Putin’s allies. 

In February, Unilever said that after a review of its Russian operations, it had concluded that the actions it put in place at the beginning of the war minimized its economic contribution to the Russian state. According to filings on Russia’s tax website, Unilever sales there rose 5% to 62 billion rubles ($680 million) last year, with its tax on income up 7% to 2.8 billion rubles.

(Corrects description of Unilever’s Russian assets in fifth paragraph.)

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