Shamed FTSE giant Coca-Cola HBC still bottling drink for Russia

Coca-Cola HBC is continuing to operate in Russia despite Vladimir Putin’s brutal war in Ukraine, The Mail on Sunday can reveal.

It is one of a handful of blue chip UK-listed companies still active in the country and has defied calls to quit from MPs and campaigners.

The latest controversy follows the revelation in the MoS Fat Cat Files that boss Zoran Bogdanovic, a Croatian national, received more than £500,000 in ‘cost-of-living benefits’ over the last two years, on top of his £4.1million salary.

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The FTSE 100 firm, which is the European bottler for the US soft-drinks giant The Coca-Cola Company, has refused to close its factories in Russia, despite many big brands leaving the country.

In March last year, The Coca-Cola Company announced it was suspending all operations in Russia, saying in a statement ‘our hearts are with the people who are enduring unconscionable effects from these tragic events in Ukraine’.

But Coca-Cola HBC chose not to follow suit and instead started making a replacement – a local Russian version called Dobry Cola, sold in a familiar-looking red can.

It said a year ago that it would continue to do business in Russia as Multon Partners – a local juice company it bought in 2005.

The firm has maintained ten bottling plants, including three in Moscow, one in St Petersburg and another in Rostov-on-Don near the border with Ukraine.

Labour MP Chris Bryant told the MoS: ‘I’m furious that people seem to think continuing to rake in roubles is an acceptable business practice when innocent people in Ukraine are being bombed out of their homes in a deliberate war of aggression.’

Russian leader Vladimir Putin’s war in Ukraine has killed thousands

Dobry Cola is the dominant player in Russia with more than a third of the soft drinks bottling market.

Earlier this month Coca-Cola HBC upgraded its annual profit guidance after a bumper performance. Operating profits more than doubled to £480million in the six months to June.

The Coca-Cola Company, which has a 23 per cent stake, received a £57million dividend in June. 

The Atlanta-headquartered giant said: ‘Aligned with our decision to suspend our business in Russia last March, we will not profit from any operation there. Any indirect benefit is being applied to charitable and social impact.’

Other major investors in Coca-Cola HBC also include Kar-Tess Holding, a company linked to the firm’s chairman Anastassis David, as well as investment firms BlackRock, Norges Bank, Fidelity and Aviva.

Coca-Cola HBC said: ‘Following The Coca-Cola Company’s decision in March 2022 to suspend its business in Russia, Coca-Cola HBC transitioned to a 100 per cent local business in Russia called Multon Partners.

‘It is a self-sufficient business managed by a local team and focused on local brands, such as Dobry Cola. The Coca-Cola Company is not involved in these operations. Our focus is to ensure the business remains self-sufficient and that we can protect our people and our assets.’

Other FTSE 100 giants are also snubbing calls to stop doing business in Russia.

Consumer goods multinational Unilever claims it is logistically very difficult to sell or close its operations there.

Unilever – whose brands include Dove, Ben & Jerry’s and Marmite – made about £556 million in Russia last year, according to the Moral Ratings Agency.

The company’s new chief executive Hein Schumacher claims that abandoning the business ‘could result in it being nationalised’, pointing to the takeover of French yoghurt maker Danone’s Russian subsidiary earlier this summer.

This post first appeared on Dailymail.co.uk