Oreo-maker, Nestle, Pepsi face pressure from European employees over Russia

[April 14, 2022]  By Jessica DiNapoli and Richa Naidu

NEW YORK/LONDON (Reuters) - Oreo-maker Mondelez, Nestle and PepsiCo face staff defections in Ukraine and pushback from workers in eastern Europe angered by the companies' decisions to maintain some business in Russia, according to internal corporate communications reviewed by Reuters and interviews with six workers.

The emerging employee activism comes on top of Ukraine's repeated appeals to Western companies to go beyond current sanctions and cut all commercial ties with Russia, with the mayor of Kviv calling such payments to Moscow "bloody money".

To be sure, the employees speaking out, or resigning, over the companies' response to Russia's invasion are mainly based in Ukraine, Poland or Eastern Europe and are a small fraction of the hundreds of thousands of workers the food makers employ.

An internal memo seen by Reuters shows Nestle has seen an unspecified number of Ukraine employees quit and others bullied on social media for remaining with a company doing business with Russia.

Roughly 130 employees at Mondelez in the Baltics region encompassing Lithuania, Latvia and Estonia sent a petition in March to CEO Dirk Van de Put to stop all business in Russia, an action not previously reported.

One Ukraine employee of Mondelez interviewed by Reuters expressed shock and dismay that their company was still promoting "The Batman" Oreo cookies in Russia and offering chances to win up to 500,000 roubles ($6,000) on an Oreo website. https://oreo.ru

The website showed cinema tickets and hats being awarded as recently as Wednesday https://oreo.ru/Home/WinnersList to winners whose phone numbers start with the Russian country code.

Another website promoting Milka chocolates https://promo.milka.ru offered Russian residents up to 20% cash back on purchases and prizes in a promotion that started March 15, three weeks after Russia invaded Ukraine.

"The Batman" movie was pulled from release in Russia one week before it was scheduled to reach theatres.

Warner Bros Discovery Inc, which owns the movie studio that made "The Batman", communicated the move to its partners, such as Mondelez, but had no influence over whether "The Batman"-branded product is removed from shelves, a person familiar with the matter said.

Mondelez did not respond directly to questions about the "The Batman" Oreos or Milka promotions but said it has no advertising on air in Russia. The company said it would suspend advertising media spending March 9.

Consumer goods companies, including Unilever and P&G, have said they are continuing business in Russia because some of their items are necessities, like diapers or milk, that everyday Russians need. They also are supporting humanitarian efforts in Ukraine.

Nestle, PepsiCo and Mondelez, three of the world's biggest packaged food makers by market capitalization, have not disclosed which brands are still sold in Russia, or what they consider to be essential.

The Mondelez petition said workers "strongly oppose" the company's decision to remain in Russia, according to screenshots of an internal social media posting shared with Reuters by an employee. The employee declined to be named because he was not authorized to speak to the media.

"Each Russian ruble paid to the state budget in the form of taxes and salaries (helps the) aggressor supply its army and kill even more Ukrainian people, among which there are children, women, elderly people," the employee petition states, according to the screenshots.

Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory and denies targeting civilians.

Mondelez European President Vinzenz Gruber responded to the post, saying that "our culture (at Mondelez) includes everyone who shares our values and calls for peace," according to the screenshot.

"We stand by our colleagues and not by their governments/country decisions," Gruber wrote.

"We appreciate that our employees are speaking up and are sharing their voice on this heartbreaking and senseless war," Chicago-based Mondelez said in a statement. "We have heard a range of different voices from colleagues around the world, and our leaders are in active dialogue with their teams as we manage day-to-day operations."

 A logo is pictured during the 152nd Annual General Meeting of Nestle in Lausanne, Switzerland April 11, 2019. REUTERS/Denis Balibouse/File Photo

'MENTALLY BROKEN'

In addition to 19 posts on internal corporate message boards, one worker at PepsiCo, two at Mondelez and three at Nestle separately told Reuters that they want to see their employers take a stronger stand against Russia.

"Our grandparents told us terrible stories" about Russian actions in Poland during World War Two, said Patrycja Stas, 40, a manager at Pepsi in Warsaw. "I see the same thing is repeating in Ukraine, and it is extremely depressing."

Stas told Reuters she is leaving her job for reasons independent of the war but said that Pepsi's ongoing business in Russia showed her she made the right decision.

Although Pepsi suspended sales of soda in Russia, it continues to sell what it calls "daily essentials," including snacks and dairy products. Pepsi declined to comment.

The head of Nestle's European business, Marco Settembri, in an internal email seen by Reuters said in March that he was "saddened to hear that employees are resigning" and "deeply concerned to hear of employees being bullied and threatened" on social media. The memo was sent to the head of Nestle's business services center in Lviv, Ukraine, as well as other executives including the company's head of human resources and head of crisis management.

Nestle had roughly 5,800 employees in Ukraine at the start of the war, but a significant number have now left the country, a Nestle spokesperson said.

Sofia Vashchenko, a manager who for nearly eight years worked in web content at Nestle in Lviv, Ukraine, before quitting this month, said in a post on LinkedIn that her team of about 20 people was "mentally broken" after listening to a Europe-wide webcast where Nestle's Settembri said the company would continue to support colleagues in Russia in response to a question about the company's operations there.

"People who are in the middle of a war with the Russian military don't want to hear that," she said last week in an interview.

Nestle initially only halted its advertising and capital investments in Russia, drawing anger from both its own employees and Ukraine officials over selling KitKat bars to Moscow.

Some Lviv-based employees sent Nestle Chief Executive Mark Schneider an open letter on Nestle's internal messaging board, seen by Reuters, in March saying "our people feel betrayed" by the company's continued operations in Russia.

Later that month, Nestle said it was halting the sale of a wide range of its brands in Russia, including KitKat chocolate bars and Nesquik.

Nestle is still selling essentials, such as baby food, in Russia but said it was donating profits to charity. The three employees interviewed by Reuters want greater transparency about what items the company considers essential.

"We have been focused on the safety and security of our Ukrainian colleagues and doing all we can to support them and their families," a Nestle spokesperson said, adding that it has been giving people advance salary payments, one-off payments to support relocations and offering people jobs in other Nestle operating companies.

In response to a question about reports of Ukrainian employees refusing to speak with Russian colleagues, Nestle told Reuters that it "immediately organized for all activities serving Nestle Russia to be handled out of Russia directly," a move that separated employees there from those in Ukraine.

"Of course I don't want to work with people in Russia. We don't know who is OK with the war," Lviv-based Nestle employee Mariana said on Tuesday. She asked that her last name not be used because she is not authorized to talk with the media.

"In (my team) we've stopped working with Russia and never want to work with them again."

($1 = 82.8750 roubles)

(Reporting by Jessica DiNapoli in New York and Richa Naidu in London; Additional reporting by Dawn Chmielewski in Los Angeles; Editing by Vanessa O'Connell and Lisa Shumaker)

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