Mondelez International, the US food giant behind Cadbury and Oreo, is fighting to keep its lucrative Russian operations alive despite mounting evidence that its continued presence is propping up Kremlin-linked oligarchs. Internal documents obtained by this newspaper reveal that Mondelez has been lobbying UK retailers to resist calls for a boycott, arguing that leaving Russia would only punish its 3,000 local employees. But sources close to the campaign say that argument is a smokescreen. The real reason, they claim, is a complex web of supply chain contracts that quietly tie Mondelez to businesses owned by sanctioned individuals.
The pressure is now reaching a tipping point. Major UK supermarkets including Tesco and Sainsbury's have faced shareholder resolutions demanding they delist Mondelez products until the company fully exits Russia. Activist investors point to the company's own 2023 annual report, which shows a 15% jump in Russian sales to £1.2 billion. That money, they argue, flows directly into the Russian economy and ultimately funds the war in Ukraine.
Mondelez's chief executive, Dirk Van de Put, has publicly defended the decision, saying in a recent earnings call that "leaving would cause more harm than good". He claims the company supplies essential food items and that its factories use only locally sourced ingredients. But leaked internal emails from the company's Moscow office tell a different story. They show Mondelez executives discussing strategies to "minimise disruption" to supply chains that involve shell companies registered in Cyprus and the British Virgin Islands. One email, dated March 2024, reads: "We need to ensure that our logistics partners are not flagged by OFAC [US Office of Foreign Assets Control]. If they are, we may need to find new routes."
Labour MP and Russia sanctions hawk Chris Bryant has called for an urgent investigation. "Mondelez is either deliberately ignoring the risks or it is complicit in funneling money to oligarchs. Either way, UK retailers need to act now," he told this newspaper. The company has also faced a backlash from its own employees. An internal whistleblower complaint filed in February 2024 alleges that senior managers in Moscow were instructed to "maintain relationships with all major distributors, even those under informal sanctions scrutiny". The whistleblower, who requested anonymity for fear of reprisals, said: "They know who they're dealing with. They just don't care."
Meanwhile, the UK's Foreign Office has confirmed that it is reviewing sanctions compliance across the confectionery sector. A spokesperson said: "We are aware of reports concerning Mondelez and are working with the Treasury to ensure full enforcement of sanctions." But critics say the government has been too slow. The Russian invasion of Ukraine began in February 2022, yet Mondelez has been able to operate largely unhindered for over two years.
The company is not alone. A recent report by the Kyiv School of Economics found that more than 400 Western companies still have a presence in Russia, many in the consumer goods sector. What distinguishes Mondelez is the scale of its brand recognition and the volume of its sales. Last year alone, the company sold over 500 million Cadbury chocolate bars in Russia. Each one, say campaigners, adds a few kopecks to the Kremlin's war chest.
For UK retailers, the pressure is becoming impossible to ignore. Asda and Morrisons have already faced protests outside their stores. A coordinated campaign is now threatening to target any supermarket that stocks Mondelez products. The company's response has been to offer discounts and marketing support to retailers that keep its products on the shelves. But sources say that strategy is backfiring. One senior retail executive told me: "Mondelez is offering us money to keep their chocolate bars on the shelves. It looks like we're being bought off. That's not a good look."
With quarterly earnings due next month, Mondelez is running out of time. The Treasury is preparing new guidance that could force companies like Mondelez to either sever all ties with Russian shell companies or face criminal penalties. Insider sources say the guidance could be released as soon as May. Until then, Mondelez will continue to defend its position. But as one former board member put it: "When the documents come out, and they will come out, the game will be up. This is a scandal waiting to explode."
