American food manufacturer Yizi International, which owns multiple well-known brands such as Oreo and Cadbury, has recently encountered considerable difficulties. Due to its continued operations within Russia, the company is facing public resistance and shareholder pressure.
On the other hand, Yizi International stated that its subsidiary's profits in Russia have reached an all-time high. The company also stated that the Russian business provides daily necessities for the local area, and if the supply is interrupted, it will lead to food supply problems for many innocent Russian households.
In a dilemma, Yizi International announced the cessation of its advertising business in Russia and appointed a new general manager to lead the local company, describing the Russian subsidiary as an independent agency.
It also explained that the products currently sold in Russia are all produced and distributed locally in Russia, and do not involve exports to Europe or imports from Europe.
Profit at a high level
In May 2023, Yizi International was blacklisted as an "international war sponsor" by the Ukrainian National Bureau for Corruption Prevention due to its continued business operations within Russia. According to Ukrainian authorities, the list was created to encourage international companies to withdraw from Russia, with the aim of weakening Russia's financial capacity to fight against Ukraine.
But the food industry is not actually affected by international sanctions, and Yizi firmly defends that its products are part of maintaining the supply of ordinary household food in Russia.
At present, Yizi International still has three factories in Russia. According to the latest quarterly report released in early February, although the revenue of Yizi International's subsidiary in Russia has declined due to advertising interruptions and currency depreciation, its profits remain at historical highs.
Its 2022 annual report shows that Yizi International's Russian subsidiary achieved a profit of 339 million US dollars, a year-on-year increase of 303%, and revenue exceeded 1 billion US dollars, a year-on-year increase of 38%. In addition, the financial report also disclosed that it has paid over $61 million in taxes to the Russian government.
Apart from Yizi, other well-known international food companies such as Nestle are still operating in Russia. Similarly, these companies have also been blacklisted by Ukraine, resulting in significant reputational damage.