Unilever’s showdown with Putin: By securing supplies to Russia, the group is making life more comfortable for aggressors in Ukraine, says ALEX BRUMMER
- Unilever has remained open in Russia during the last gruesome war year
- The group negotiates under the banner of the trivialization of “sustainable living”
- The company has earned around £500m since the dispute began
Amid the drama of assembling a force of Leopard tanks and fighter jets to repel the latest Russian offensive in Ukraine, the execution of the West’s financial crusade has fallen into oblivion.
The Russian economy is doing much better than NATO could have hoped, with the IMF predicting a recovery this year and next.
Russian oil and other trade has been directed to non-sanctioned countries.
And despite Western support, Ukraine’s economy is being pushed to its limits, with output set to fall another 5% this year.
The willingness of China, India and others to maintain trade with Vladimir Putin in the face of sanctions makes it imperative for Western companies to tighten the noose.
Staying put: Unilever has a strong presence in Russia, with 3,500 employees and four major production sites
It is humiliating for British luxury fashion house Paul Smith that its latest iconic clothing designs are still on display a year after the outbreak of hostilities. Smith had to retreat in haste.
What’s even more surprising is that UK’s flagship consumer goods group Unilever, which operates under the banner of commoditizing “sustainable living”, has remained open in Russia over the past the last year of macabre war. The maker of Dove soap, Hellmann’s mayonnaise and Magnum ice cream has earned around £500million since the dispute began.
Unilever has a strong presence in Russia, with 3,500 employees and four major production sites. He maintained that he did not want to harm the welfare of his staff.
However, it is clear that by ensuring the supply of hygiene and other products to Russia, the group makes life more comfortable for the aggressors in a bloody conflict.
A continued presence is a direct affront to Unilever’s image as apostles of ethical investing. Unlike the shabby Unilever, some big names in capitalism did not hesitate to withdraw.
Goldman Sachs had a thriving investment bank in Russia, penetrating deep into the country’s commerce. He soon severed his ties with the rest of Goldman and the financial system, and the rump was bought out by local managers.
Western sanctions may have hurt living standards in Moscow, but they have not brought the country to its knees.
When they were first imposed, it was thought that financial measures such as cutting Putin from the Swift money transfer system and Western banks would bring his kleptocracy to its knees.
Banking sanctions finally brought the apartheid regime in South Africa to its senses. The big difference is that Pretoria was besieged by both the West and the non-aligned world.
Putin has forged an alliance of disgruntled people which reinforces a still unfulfilled territorial ambition.
A widely held view when Britain left the EU was that the City’s ability to influence financial trading in Europe would be diminished.
The EU was desperate to abandon the Anglo-Saxon model. Among other things, he proposed a crackdown on dark trading – or pools that allow critical players such as big battalion investors to trade without disclosing details until they are finished. Brussels seems to have decided that if you can’t beat them, join them. Just weeks ago, Euronext executives were making dubious claims about overtaking the London Stock Exchange for equities trading.
In an interview with the newspaper The Trade, Simon Gallagher, head of cash and derivatives at Euronext, concedes: “The weight of the Financial Conduct Authority and the City in European regulation has never been so important. After Brexit, the City defines the rules of continental Europe more than ever.
The government’s view – that of all sectors of the economy, the Square Mile was fit enough to swim on its own – is being vindicated.
Do you remember Lotus? Colin Chapman’s Norfolk-based racing and fast cars were considered a triumph of British engineering.
But like so many brilliant British car brands, it failed commercially and ended up in the hands of China, with the advanced engineering – some of which inspired the Tesla Roadster – remaining on those shores.
It is now set to launch Lotus Technology in New York with a heady valuation of £4.4 billion. What this will mean for Lotus UK, the brains and heritage behind the brand, is anyone’s guess. Why New York rather than London? Just check how Ferrari performs against Aston Martin.