French dairy and food giant Danone on Friday announced plans to exit the Russian market, following the likes of Coca-Cola, McDonald's and other global food brands to do the same.
Danone expects to take a $1 billion hit as it ends its business.
Danone said in a press release that it has begun to transfer control of its essential dairy and plant-based business to an entity in Russia.
According to the company, the exit will cost 1 billion.
Danone said its Russian operations accounted for 5% of the company's net sales.
Danone believes the move is the best way to ensure long-term local business continuity for its workers, customers and partners in Russia.
Several multinational food and beverage companies have either exited Russia or been forced to scale down their business in the country due to sanctions against it. The company stopped making its popular soda brands in Russia. Coca-Cola stopped making and selling marquee brands in the country and its bottler in the region is only working with local brands. Sales of its popular global brands in Russia have been suspended. Milk, baby formula and baby food are still sold by the two companies. McDonald's, Starbucks, and other major food brands have left Russia after closing their stores.
Following a similar announcement by Nissan, Danone announced its exit from Russia. Nissan said it was selling its Russian unit to a state-owned entity for $1. Major car brands such as Toyota, Volkswagen, Mercedes-Benz, and General GM have stopped manufacturing in Russia. Apparel giants like Nike and H&M are among the companies that have stopped doing business in Russia. Several tech giants have stopped hardware sales and blocked access to their websites in Russia.
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