Lactalis to keep Russia business

The company cited its role in supplying staples
calendar icon 17 October 2022
clock icon 2 minute read

Lactalis, the world's largest dairy company, said on Friday it will maintain its activities in Russia to supply the local food market, after French peer Danone  announced it would cede control of its dairy business in the country, Reuters reported.

"We have decided at this stage to remain in Russia," a spokesperson told Reuters. "We consider that we are fulfilling our mission to feed the civilian population."

Faced with a geopolitical standoff over Moscow's invasion of Ukraine, many multinational firms have divested their Russian assets. Danone's announcement followed that of Nissan earlier this week in which the car maker said it would offload assets to the Russian state.

But some Western food firms like Lactalis have chosen to maintain a presence, citing their role in supplying staples.

Privately owned Lactalis has four production plants processing local milk and about 1,900 staff in Russia. The country contributed about 1% of its worldwide sales of 22 billion euros ($21.39 billion) last year.

The group has halted industrial investments and advertising in Russia and separated its local business from the rest of its activities, the spokesperson said, adding it had no contracts with the Russian state.

Lactalis has also maintained its presence in Ukraine, where it has three production sites and around 850 staff.

The factories are in Ukrainian-held territory near the frontlines in the east and south of the country and have experienced some stoppages for security reasons.

Before the war, Lactalis' Ukrainian business generated similar sales to its Russian activity, the group said.

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