Coca-Cola HBC's Russian division quadruples profits on “Dobry Cola” sales after corporation vows to leave the country

The profits of Multon Partners LLC, the Russian division of Coca-Cola HBC Holdings B.V., totaled 10.25 billion roubles (a little over $111 million) in 2023 — more than four times more than in 2022 (2.3 billion roubles), according to the company's financial statements.

The surge in profits is significant even when measured against the company's earnings before the war, with the company achieving a 150% increase in 2023.

Back in March 2022, almost immediately after Russia launched its full-scale invasion of Ukraine, Coca-Cola announced that it was suspending its business in the country. Its chief competitor, PepsiCo, issued a similar statement. However, leaving the Russian market behind proved to be easier said than done.

“They said goodbye, but they didn't leave. They announced their departure, but in fact they didn't go anywhere, and the products were available on the market for more than six months, even produced by Russian factories,” complained Natalia Sakhnina, CEO of the Russia beverage conglomerate Chernogolovka Group.

For a while, Coca-Cola did engage in selling off the remaining stock of its products in Russia. But despite CEO James Quincy saying his company could see its business in Russia “disappear completely at some point,” such an outcome did not occur in practice.

While the production of Coca-Cola brands in Russia was discontinued, they were replaced by “Dobry Cola” (lit. “Kind Cola”). While investments were suspended and concentrate for the production of traditional Coca-Cola HBC beverages was no longer supplied, the company’s Russian division transitioned to buying raw materials on the domestic market. By the end of 2023, “Dobry Cola” had become one of the ten most popular everyday goods brands among Russian consumers, according to an analysis by the research firm NTech. “Dobry” also became the market leader in the sweet carbonated beverages category, overtaking “Chernogolovka” and Cool Cola.

In a comment to Reuters issued in August 2022, Coca-Cola HBC said that “Dobry Cola has no connection with Coca-Cola or the Coca-Cola Co.”

In fact, the company itself, formerly Coca-Cola HBC (Coca-Cola HBC Eurasia LLC), changed its name to Multon Partners, but it remains under the ownership of the Dutch Coca-Cola HBC Holdings B.V., which is in turn part of the global Coca-Cola Hellenic Bottling Company (HBC).

The Atlanta-headquartered and NYSE-listed Coca-Cola Company notably holds a 23.2% stake in Coca-Cola HBC AG.

Multon Partners' revenue has not shown overall growth comparable to its success in the Russian market, rising from 72.3 billion roubles in 2022 to 77.3 billion roubles in 2023. The growth in net profit in 2023 was likely influenced by the previous year's write-offs.