Did Coca-Cola Ever Really Leave Russia?

When Russia invaded Ukraine over a year ago, The Coca-Cola Company (NYSE: KO) was among the first of many multinational companies to announce that they would halt operations in Russia to show their support for Ukraine.

Fast-forward to the present day: it went almost unnoticed that The Coca-Cola Company is still making gains in Russia a year into announcing they would stop operations in the country. They just moved it under a different name.

Twitter user Beefeater called attention the matter, and here’s what we found.

The Coca-Cola Company’s products are made available in markets around the world by selling concentrates to partners, also called “bottlers” who produce, distribute, and sell the ready-to-drink version of the products to trade partners. Coca-Cola Hellenic Bottling Company or Coca-Cola HBC AG (LSE: CCH) is one of these bottling companies. 

Founded in Greece, headquartered in Switzerland, and listed in London, Coca-Cola HBC AG is The Coca-Cola Company’s third-largest bottler in terms of volume — it distributes to 28 countries in three continents. And one of these countries was — at least officially until August — Russia.

Coca-Cola HBC AG announced in August that “in close alignment with The Coca-Cola Company, we have stopped all production and sales of brands of The Coca-Cola Company in Russia. There are no plans to reintroduce The Coca-Cola Company brands or products in any format.”

In the same announcement, they said that their Russian operations have “been renamed Multon Partners,” and this would “focus on the production and sale of existing local brands — Dobry, Rich and Moya Semya — and raw materials will be sourced from within the market. It will be managed and operated locally.”  

Shortly after, Multon Partners introduced the Dobry Cola, “dobry” in Russian means “good” or “nice.” And one RT reporter said that it tastes just like Coke. (But she also said in a reply that it tastes “nothing like” the Coke in the US, “but I also think that nothing in Russia tastes anything like the products in the U.S.”)

Multon has been producing and selling this Coke lookalike since, and reports say it’s even gotten as far as Switzerland, the home base of Coca-Cola HBC AG.

Now, Coca-Cola HBC AG, which owns Russian cola producer Multon Partners, is also jointly owned by The Coca-Cola Company. The Wikipedia page, which accessed Coca-Cola HBC AG’s shareholder structure page on its website in 2016 — the same page that’s now curiously returning a 404 error message — says The Coca-Cola Company has a 23.2% stake in Coca-Cola HBC AG.

If true, it then means that no, The Coca-Cola Company never actually left Russia; unlike, for example, McDonald’s, which exited the country by selling its operations, minus licenses, to a local buyer.

A quick internet search would also lead one to this 2005 note announcing the approval of the acquisition of sole control of Multon, “a Russian company that bottles, distributes and markets fruit juices and nectars in Russia, Ukraine, Belarus, Kazakhstan, Uzbekistan, and Tajikistan,” by … wait for it …  The Coca-Cola Company (TCCC) and Coca-Cola Hellenic Bottling Company.

Information for this briefing was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply