Danone Pulling Out of Russia

Oct. 18, 2022

Low margins and the war drive away the French dairy giant.

Danone plans to divest most of its business in Russia, a move that will lead to an estimated writedown of about $978 million.

The French-based dairy giant has announced that it is looking to sell its dairy business, which is the largest in Russia. The decision comes after Danone had announced, shortly after the invasion began early this year, that it would only produce “essential items” and would not make further investments in the country.

Russia accounts for about 5% of Danone’s net sales, but is considered a low-margin business with little potential. "Russia is clearly an asset they had to exit from," said an analyst in a note quoted by Reuters.

The business could potentially be sold to a state-owned dairy company or be distributed among several buyers.

About the Author

Pan Demetrakakes | Senior Editor

Pan has written about the food and beverage industry for more than 25 years. His areas of coverage have included formulations, processing, packaging, marketing and retailing. Pan worked for Food Processing Magazine for six years in the 1990s, where he was operations editor (his current role), touring dozens of food plants of every description. He has also worked for Packaging and Food & Beverage Packaging magazines, the latter as chief editor, during which he won three ASBPE awards. He is a graduate of Stanford University with a BA in communications.