Manufacturer Evian faces £170m after Russian factories seized by Kremlin

Danone continued its business in Russia after the invasion of Ukraine while looking for a buyer. Photo: MAXIM SHIPENKOV/EPA-EFE/Shutterstock

French food giant Danone suffered a €200m (£170m) loss after Vladimir Putin seized its Russian factories.

Company, which owns brands such as Evian and Actimel, has said it intends to “deconsolidate”. its activities in the country.

This month, the Kremlin took control of Danone's main dairy and plant (EDP) subsidiary, as well as Carlsberg's stake in a local brewery.

The company said the process took place without its knowledge or approval, adding that it no longer controlled its operations in Russia, although it remained the legal owner.

Danone said it would incur losses of 200 million euros as a result of the confiscation, as well as accounting costs of about 500 million euros linked to foreign currencies. rates.

The company said: “Danone will continue to investigate the situation to understand the implications of the Russian authorities' decisions on Danone's current EDP operations in Russia, as well as on the current sale process.”

Shares fell 3% in Paris in start of trading.

Founded in 1919, Danone said last October that it was looking for a buyer for its food business in Russia. about 1 billion euros as a result of operations.

The world's largest yogurt maker said it would continue to provide information on any developments related to its operations in Russia, adding that it was looking into ways to protect its assets and rights as a shareholder while putting people's safety first.

Danone is one of the few Western companies that continues to operate in Russia after the invasion of Ukraine.

Food and drink companies like Danone argue they have an obligation to continue feeding Russia's mass population.

Earlier this week, competitor Unilever said it was “least bad option.”

The cost of the seizure of the Russian business was disclosed after Danone reported better-than-expected 6.4% LFL sales growth in the second quarter.

>Growth was driven by higher prices that offset higher costs and lower volumes sold.

Danone said it expects full-year revenue growth in the top of its range of 4% to 6% as it grows sales volumes during the year.