Russians are still indulging in foreign-made Toblerone chocolate, showing the difficulty of USA manufacturer Mondelez’s plan to isolate its business in the country from its global operations.
Facing continuing pressure from employees, activists and investors to leave Russia, Mondelez planned to make its business there “standalone with a self-sufficient supply chain” by the end of last year. It said in February that products in Russia were made and distributed locally, with “no imports of finished goods from Europe into Russia or exports from Russia into Europe.”
But, high-end Toblerone chocolate is made in Switzerland and Slovakia, and the sales documents seen by international media indicate that 100 tons of it were sold in Russia in the first four months of this year, although volumes were down 12% from a year earlier. The continued sales of the triangular chocolate bars, a shape reminiscent of the peaks of the Swiss Alps, show the challenges of removing Russia from the rest of Mondelez’s business.
Food including chocolate does not fall under the multitude of sanctions imposed by Western countries aimed at punishing Russia after it invaded Ukraine in 2022. Since then, many companies have pledged to either exit the country or sell or wall-off their Russian operations. Mondelez said in a statement that it is possible that “branded products could be entering Russia through third-party distributors or brokers,”grey market importers” looking to capitalise on demand for Western brands that retreated after the war.
The country remains a significant part of Mondelez’s business. The company’s revenues in Russia accounted for 2.9%, or about $1 billion, of its $36 billion in global sales last year. International media reported Toblerone bars on shop shelves in Moscow and St. Petersburg with packaging saying they were made in Mondelez’s factory in Bern, Switzerland on November 23. A 100 gram bar was for sale for 175.99 roubles ($2.02 US dollars).
To stop third-party distributors or brokers from selling Toblerone in Russia, Mondelez could file lawsuits against them and retailers stocking the chocolate in Russian courts over trademark infringement, said Peter Maggs, a research professor at the University of Illinois College of Law and expert on Russian law.
“For the poor company, it’s like a whack-a-mole system, if there’s a demand, various people will be bringing the stuff in,” Maggs said. “Unlike bringing in narcotics, you’re not going to get stopped at customs” for chocolate. “It’s really up to the company to enforce it,” he added.
