You’re not you when you continue to work in the Russian Federation: the NACP added PepsiCo and Mars to the list of international sponsors of the war
The National Agency on Corruption Prevention (NACP) has included two leading food corporations, PepsiCo and Mars, on the list of international sponsors of the war. Despite the declaration of reduction of their business, cessation of advertising activities, and production of their products, they continue to work in the Russian Federation, paying significant taxes to its budget, thereby supporting the economy of the aggressor country.
PepsiCo produces soft drinks, juices, chips, snacks, dairy products and other food products under the main brands Chester’s, Chipsy, Lay’s, Mirinda, Pasta Roni, Pepsi, Propel, Sandora, 7up, Simba, Snack a Jacks, Sonric’s, Tropicana, etc.
The company has been operating in Russia since 1974, has 19 factories, about 20,000 employees and 40,000 agricultural workers. According to the indicator of net profit, PepsiCo is the fourth largest company in the field of beverages and food products in the Russian Federation.
PepsiCo increased its revenues in the Russian Federation in the first year of a full-scale invasion. Thus, the turnover of “PEPSICO HOLDINGS” LLC for 2022 increased to $2.59 billion, in particular, the net profit increased by 333% to $525 million, compared to 2021. Over $115 million of taxes were paid to the budget of the Russian Federation.
In March 2022, the company announced the cessation of advertising activities and the production of beverages in Russia in connection with the full-scale invasion of Russia into Ukraine. However, in August 2022, the production of drinks “7Up” and “Mirinda” under the brands “Evervess” and “Frustyle” resumed. In March 2023, the production of the “Pepsi” drink resumed under the “Evervess” (higher price segment) and “Lyubymyі” (lower price segment) brands. In addition, PepsiCo launched a new brand of lemonade in the country called “Russian gift” to replace the previous products. The company also continues the production and distribution of other products: chips, snacks and dairy products. According to information from the media, PepsiCo’s Lay’s chips were found in the food rations of Russian soldiers.
The absence of sincere intentions to leave the Russian market is also indicated by the fact that more than 580 open vacancies in the Russian Federation are listed on the company’s career page. By creating jobs, foreign companies free the Kremlin from the burden of unemployment benefits and related social problems.
Mars also produces food products, famous for chocolate bars, but also produces pet food, chewing gum, beverages, fast food, canned sauces. The main brands are Mars, Snickers, Milky Way, Twix, Bounty, M&M’s, Whiskas, Pedigree, Uncle Ben’s. The corporation also owns a series of Wrigley trademarks.
Mars has been working in Russia for more than 30 years, invested $2.5 billion in the economy of the aggressor country, created more than 6,000 jobs and has 10 factories on the territory of Russia.
The company promised to reduce business on the territory of the Russian Federation after the start of full-scale aggression. “Any profit from Russian business will be used for humanitarian purposes. The company will not import or export products”, — the company’s official statement read.
However, factories continue to operate in Russia with increased revenues in 2022 compared to 2021. The turnover of LLC “Mars” for 2022 grew to $2.45 billion, the net profit increased by 59% to $377 million, taxes were paid to the budget of the Russian Federation for more than $93 million.
On the personnel search site, the Russian branch of LLC “Mars”, as well as PepsiCo, publishes announcements about the recruitment of new employees (more than 100 current vacancies).
It is worth noting that by paying taxes, foreign companies help the Russian economy. This also applies to the recently introduced military value added tax and income tax. As a result, all this affects Russia’s ability to lead against Ukraine.
We would like to remind you that the NACP is the body responsible for the compliance system in the private sector. During compliance procedures, counterparties are subject to integrity checks, including socially responsible business conduct in accordance with OECD standards. The list of “International War Sponsors” on the “War and Sanctions” portal is a powerful reputational tool for achieving the integrity of supply chains in the international dimension, the exit of international business from Russia, thus reducing the financial and technological ability of the terrorist country to kill Ukrainians. One of the “leverages” of the platform is cooperation with the World-Check database, which is used by banks and insurance companies for risk assessment. That is why for global companies, the consequences of being on the list become worse than continuing to do business with the aggressor country.