Danone plants in Russia continuing to operate as usual - ministry

MOSCOW. Oct 17 (Interfax) - Danone's plants in Russia are continuing to operate normally, jobs are being preserved and products are being delivered to the Russian market, the Agriculture Ministry said.

The French food company announced on Friday that it has decided to begin the process to transfer effective control of its Essential Dairy and Plant-based (EDP) business in Russia to an unnamed party. The transaction will result in the deconsolidation of Danone's EDP Russia business, the company said in a press release.

In the first nine months of 2022, the EDP Russia business represented about 5% of Danone net sales. The transaction could result in a write-off of up to 1 billion euros, the company said.

Danone is one of the largest producers of dairy products in Russia. Its brand portfolio includes Activia and Prostokvashino, among others.

Danone was the largest producer of dairy products in Russia in 2021 with sales of 122.7 billion rubles, according to a ranking prepared to national dairy producers union Soyuzmoloko, Streda Consulting and Milknews. PepsiCo Inc. (Wimm-Bill-Dann) followed with sales of 107.8 billion rubles, and Molvest Group was a distant third with 38.5 billion rubles.

The Agriculture Ministry, citing data from the Federal Statistics Service, also said that dairy production in Russia demonstrated "strong growth" in the first eight months of 2022. Output was up 3.1% year-on-year for market milk, 10.9% for butter and 3.1% for cheese.