Since Unilever solemnly promised at the beginning of 2022 not to benefit from the Russian branch of the company due to the war in Ukraine, it has received at least 200 million euros from Unilever Russia. The royalties flow to the head office in billions of rubles at a time, largely via the Netherlands.
This is evident from research by RTL Z.
‘No more money to or from Russia’
Shortly after the outbreak of war in Ukraine, Unilever, like many other companies, was under great pressure to leave Russia. The company did not do that, but it promised that no more money would flow to or from the Russian branch. Unilever also promised that it would no longer import or export anything to the country.
In this way, the company would not benefit from its continued presence in Russia. According to Unilever, the alternative was even worse: if the company were closed down or sold, the assets would still end up in the hands of the Russian state, the company claims.
Intellectual property
But to this day, billions of rubles flow from Russia to the headquarters in London, often via the Netherlands.
The Russian subsidiary’s annual accounts for 2023 show that Unilever continues to benefit from the Russian branch. Not through dividend payments, but by having the Russian branch pay for the use of intellectual property, such as brands and recipes. This concerns typical Russian brands such as Inmarko (ice creams), but also well-known names such as Knorr, Magnum or Hellmann’s.
18 billion rubles
In fact, those amounts have increased enormously in 2023 compared to a year earlier. In total, Unilever Russia paid more than 18 billion rubles (181 million euros) to other companies within the Unilever Group outside Russia, mainly for the use of brands and recipes. In this way, the company still benefits from the flourishing Russian business.
Moreover, it is a multiple of the payments in 2022, which then amounted to more than 5 billion rubles (50 million euros). Since the outbreak of the war, at least 200 million euros in money earned in Russia has flowed to the head office. This is in stark contrast to Unilever’s promise that the company would not benefit from its presence in Russia.
Tens of millions of euros via the Netherlands
The lion’s share of the money is transferred to Unilever Global IP Limited, a British subsidiary charged with collecting royalties for the use of ‘all forms of intellectual property’, such as patents, trademarks, ‘know-how’ and ‘similar rights’. That company benefited to the tune of 13 billion rubles (130 million euros) from the continued Russian activities.
A large part of the money is also channeled through the Netherlands to London. Unilever IP Holdings BV received 4.5 billion rubles (about 45 million euros) from Russia.
Unilever recognizes payments
After much deliberation, Unilever acknowledges that the payments were made from Russia. According to the company, part of the intellectual property relating to Russian Unilever brands such as Inmarko and Kalina was transferred to the Russian company last year. A lot of money was paid for this, but according to Unilever this is necessary to set the Russian subsidiary apart.
It is not clear whether Unilever Russia has bought off the intellectual property for a number of years with the deal or has acquired it forever.
A spokesperson also does not want to say whether this will stop payments from Russia completely. Since the Russian branch also sells well-known global brands such as Ax, Dove and Magnum, this does not seem likely. In that case, millions more will flow from Russia to the head office in London in the coming years.
It is certain that Unilever, after it had promised not to receive any more money from Russia, still benefited from its Russian activities to the tune of at least 200 million.
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Last year, research by Follow the Money also showed that the Russian branch of Unilever had managed to significantly increase profits and that advertising expenditure had increased, while Unilever had promised not to spend any more money on advertising. The defense then was that those contracts had already been concluded before the decision.
