RUSSIA- American multinational food manufacturing company, Kellogg, is divesting its operations in Russia to local snacks and drinks maker Chernogolovka.
Founded in 1998, Chernogolovka makes snacks, energy drinks, and bottled water, and has been producing Cola Chernogolovka since May, following the suspension of sales in Russia by soda giants Coca-Cola and PepsiCo.
Chernogolovka, which has also started supplying soft drinks to the Russian outlets of Burger King and KFC in April, said it has signed a binding agreement with KelloggKellogg which owns cornflakes and pringles brands joins a growing list of multinational food and beverage brands disposing of their business operations in the region following the ongoing Russo-Ukrainian war.
The company confirmed to Just foods that, the decision was ascribed to continued stress in net sales in the country as well as the ongoing conflict between Russia and Ukraine has made sustaining the business difficult.
The Kellogg business in Russia currently represents less than 1% of the company’s total net sales, a company spokesperson said, adding that sustaining its operations there has now become untenable.
“As a result, we have decided to divest our operations in Russia to a local Russian company, Chernogolovka,” Said the company spokesperson.
Kellog, which employs 1600 workers in Russia in its three plants, says that its exit has carefully considered the safety and welfare of the employees. The company added that the sale for an undisclosed sum is subject to several local government regulatory approvals.
“As a result, we have decided to divest our operations in Russia to a local Russian company, Chernogolovka,”
The company says that the exit was not new to employees as it had initiated a partial exit in March last year when it suspended some of the operations.
The owner of Rice Krispies brand had already suspended shipments to and investment in Russia in March following the conflict. However, despite the strain, the food giant continued to operate to avoid exacerbating the food-security risk.