Jacobs coffee producer to stop selling foreign coffee brands in Russia by end of 2023

JDE Peet’s, Dutch company that owns trademarks like Jacobs, L’Or, Tassimo, and Douwe Egberts, will end sales of Western coffee and tea brands in Russia before the end of 2023, Reuters reports.

The news agency noted that the company’s shares dropped by 1.6% yesterday afternoon.

JDE Peet’s will only sell local coffee brands in Russia. CEO Fabien Simon said that the company will not leave Russia due to the high risk that the company’s “assets and intellectual properties would be nationalised by the Russian state or given to third parties in Russia”.

Simon added that JDE Peet’s remains in Russia because it produces essential products and its sales are fully compliant with sanctions imposed on Russia for its full-scale invasion of Ukraine.

He noted that the company bears moral responsibility to its employees all over the world, including those in Russia, where more than 900 people are working for JDE Peet’s. The coffee giant’s industries are located near St. Petersburg and Novosibirsk.

A report compiled by the company shows that it has already sustained losses amounting to €185 million over the Jacobs rebranding in Russia.

In late March, Russia’s Kommersant daily reported that the Russian branch of JDE Peet’s could forgo the use of the Jacobs trademark. According to the newspaper’s source, the company could start selling its coffee under the Monarch or Milicano brands.

Jacobs Douwe Egberts Rus, a Russian factory in the Leningrad region, produces instant coffee, coffee blends, roasted ground and bean coffee Jacobs Monarch, Jacobs Monarch Millicano, and Carte Noire.

JDE Peet’s then told Kommersant that the company intended to continue serving clients and consumers in Russia through its local branch. The further localisation efforts, which would particularly impact the brand portfolio, would satisfy the existing demand in the best possible way, a company spokesperson said.

On 25 April, Russian President Vladimir Putin signed an order to transfer foreign assets under temporary management if Russian assets are confiscated overseas. On 16 July, he signed a decree which handed over the share of Russia’s Danone branch, which belonged to the foreign company, to the temporary use by the Federal Agency for State Property Management.

Deputy Prime Minister and Agriculture Minister of Chechnya Yakub Zakriev, 32, became the new CEO of Danone Russia. Zakriev is also a nephew of Chechnya’s leader Ramzan Kadyrov.

Danone suspended all investment projects in Russia following Moscow’s full-scale invasion of Ukraine, and stopped imports under Evian and Alpro brands to Russia in late April 2022.