Nestle, tobacco groups latest companies to pull back from Russia

March 9 (Reuters) – Nestle(NESN.S), Philip Morris (PM.N)and Imperial Brands (IMB.L)joined the list of multinationals stepping back from Russia on Wednesday as pressure mounts from consumers in the West to take a stand against the invasion of Ukraine.

The world’s biggest packaged food group fell into line with rivals Procter & Gamble (PG.N) and Unilever (ULVR.L) in halting investment in Russia, while cigarette maker Philip Morris said it would scale down manufacturing and Imperial went further and suspended it.

The moves came after Coca-Cola (KO.N) and McDonald’s (MCD.N) halted sales in Russia, where a senior member of the ruling party has warned that foreign firms which close down could see their operations nationalised. read more

McDonald’s said the temporary closure of its 847 stores in the country would cost it $50 million a month. read more

Sportswear firm Adidas (ADSGn.DE)also quantified the cost of scaling back its operations, saying it would take a hit to sales of up to 250 million euros. read more

PepsiCo (PEP.O) and Starbucks (SBUX.O) have also joined the dozens of global companies closing stores, factories or exiting investments to comply with sanctions or due to supply disruptions. read more

Those supply hurdles include the world’s top three shipping giants suspending container routes.

Yum Brands Inc (YUM.N), parent of fried chicken giant KFC, said it was pausing investments in Russia, a market that helped it achieve record development last year. read more

‘LAWS OF WAR’

In response to the exodus, Andrei Turchak, secretary of the ruling United Russia party’s general council, warned that Moscow might nationalise idled foreign assets.

“United Russia proposes nationalising production plants of the companies that announce their exit and the closure of production in Russia during the special operation in Ukraine,” Turchak wrote in a statement published on the party’s website on Monday evening. read more

The statement named Finnish privately owned food companies Fazer, Valio and Paulig as the latest to announce closures.

“We will take tough retaliatory measures, acting in accordance with the laws of war,” Turchak said.

SANCTIONS

Moscow, which calls its invasion of Ukraine a “special military operation”, has been hit by sweeping Western sanctions that have choked trade, led to the collapse of the rouble and further isolated the country.

Banks and billionaires have also been targeted, with the European Commission preparing new sanctions targeting additional Russian oligarchs and politicians and three Belarusian banks, Reuters reported. read more

While the war in Ukraine and the sanctions have bolstered prices for commodities which Russia exports such as oil, natural gas and titanium, those sanctions have largely barred Moscow from taking advantage of the high prices.

On Tuesday the United States banned Russian oil imports. read more

U.S. oilfield services company Schlumberger (SLB.N), which derives about 5% of its revenue from Russia, said the ongoing conflict would likely hurt its results this quarter. read more

Global commodities trader Trafigura Group raised a $1.2 billion revolving credit facility from banks to help address soaring energy and commodity prices. read more

Norway’s Yara (YAR.OL), a top fertiliser maker, said on Wednesday it would curtail ammonia and urea output in Italy and France due to surging gas prices.

Reporting by Reuters bureaux; writing by Sayantani Ghosh and Paul Sandle; editing by Jason Neely and Jane Merriman

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