28 Jun 2022 17:19

Diageo leaving Russia

MOSCOW. June 28 (Interfax) - British Diageo plc, one of the world's largest alcohol producers, is leaving the Russian market.

"After we stopped exporting and selling finished products to our customers in Russia in March, we made the difficult decision to have to gradually reduce our commercial activities in the country," a company spokesperson told Interfax, adding that this process of winding down business in the country will take about six months.

"We expect this process to take about six months, during which time we will remain focused on supporting our employees, including providing them with an expanded compensation package while fully complying with Russian law," the Diageo representative said.

As reported, in early March, the company suspended shipments to Russia "in view of the state of global supply chains."

Diageo started its own distribution in the Russian market in 2006, according to the company's website.

In 2020, the company began bottling whisky under the Bells and White Horse brands at the CJSC Sparkling Wines plant in St. Petersburg.

According to the SPARK-Interfax system, the revenue of JSC D Distribution, Diageo's main operating entity in Russia, increased 36.4% to 18.53 billion rubles in 2021, after growing 3.1% in 2020. Net profit decreased by 3.7%, to 1.46 billion rubles.

Since 2017, Diageo's other wholesale entity, Diageo Brands Distributors LLC, has been Diageo's main supplier. The revenue of this company last year increased by 44.5%, to 8.17 billion rubles (in 2020 it was down by 5.3%). Net profit was 325.48 million rubles, compared to a loss of 36.77 million rubles a year earlier.

Diageo is one of the global leaders in the production and sale of alcoholic beverages. Its portfolio includes brands such as Smirnoff, Black Label, Johnnie Walker, J&B, Guinness, Baileys, Captain Morgan, Gordon's and others.