Embarrassed FTSE giant Coca-Cola HBC is still bottling booze for Russia
Embarrassed FTSE giant Coca-Cola HBC is still bottling booze for Russia
- Coca-Cola HBC is the European bottler of the American giant The Coca-Cola Company
- In March 2022, The Coca-Cola Company suspended all operations in Russia
- But Coca-Cola HBC started making a Russian version called Dobry Cola
Coca-Cola HBC continues to operate in Russia despite Vladimir Putin’s ruthless war in Ukraine, The Mail on Sunday can reveal.
It is one of the few UK listed blue chip companies still operating in the country and has rejected calls from MPs and campaigners to stop.
The latest controversy follows the revelation in the MoS Fat Cat Files that boss Zoran Bogdanovic, a Croatian national, has been paid more than £500,000 in ‘living expenses’ over the past two years, on top of his £4.1m salary.
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The FTSE 100 company, the European bottler of US soft drink giant The Coca-Cola Company, has refused to close its factories in Russia, despite many major brands leaving the country.
In March last year, The Coca-Cola Company announced it would suspend all operations in Russia, saying in a statement “our hearts are with the people who are suffering unconscionable consequences from these tragic events in Ukraine.”
But Coca-Cola HBC chose not to follow suit and instead began making a replacement – a local Russian version called Dobry Cola, sold in a familiar-looking red can.
It said a year ago it would continue to do business in Russia as Multon Partners – a local juice company it bought in 2005.
The company has maintained ten bottling plants, including three in Moscow, one in St. Petersburg, and another in Rostov-on-Don near the border with Ukraine.
Labor MP Chris Bryant told the MoS: “I am furious that people seem to think that continuing to rake in rubles is an acceptable business practice when innocent people in Ukraine are being bombed from their homes in a deliberate war of aggression.”
Russian leader Vladimir Putin’s war in Ukraine has cost the lives of thousands
Dobry Cola is the dominant player in Russia with more than a third of the soft drink bottling market.
Earlier this month, Coca-Cola HBC raised its annual profit forecast after an excellent performance. Operating profit more than doubled to £480 million in the six months to June.
The Coca-Cola Company, which has a 23 percent stake, received a dividend of £57 million in June.
The Atlanta-headquartered giant said: “In line with our decision to suspend our operations in Russia last March, we will not benefit from any operations there. Any indirect benefit is used for charitable and social impact.’
Other major investors in Coca-Cola HBC include Kar-Tess Holding, a company associated with Anastassis David, the company’s chairman, and investment firms BlackRock, Norges Bank, Fidelity and Aviva.
Coca-Cola HBC said: “Following The Coca-Cola Company’s decision in March 2022 to suspend its operations in Russia, Coca-Cola HBC transitioned to a 100 percent local company in Russia called Multon Partners.
‘It is a self-sustaining company led by a local team and focused on local brands, such as Dobry Cola. The Coca-Cola Company is not involved in these operations. Our focus is to ensure that the company remains self-sufficient and that we can protect our people and our assets.”
Other FTSE 100 giants are also declining calls to stop doing business in Russia.
Consumer goods multinational Unilever claims it is logistically very difficult to sell or close its operations there.
Unilever – with brands such as Dove, Ben & Jerry’s and Marmite – made some £556 million in Russia last year, according to the Moral Ratings Agency.
The company’s new chief executive, Hein Schumacher, claims that shutting down the company “could lead to nationalisation”, pointing to the acquisition of the Russian subsidiary of French yogurt maker Danone earlier this summer.