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Saturday, April 20, 2024

Chocolate firm boycott spreads

Now even the Norwegian Parliament may drop all products made by Oslo’s iconic chocolate maker Freia. Its milk chocolate has long been hailed as “a little piece of Norway” illustrated by idyllic Norwegian dairy farms, but Freia is owned by the huge US-based food producer Mondelez and it’s been blacklisted by Ukraine.

The Freia chocolate factory in Oslo’s Rodeløkka district was modernized in 1983 and taken over first by Kraft Foods that later evolved into the huge US company Mondolez. It has landed on Ukraine’s blacklist of companies still operating in Russia, setting off a boycott of Freia products in Norway.  PHOTO: Wikipedia

Freia hasn’t been Norwegian-owned since it was controversially bought up first by Kraft Foods that later evolved into Mondelez. Freia has, however, remained popular as a local employer, chocolate producer and major sponsor of various sports and Norway’s national trekking organization DNT.

The Oslo-based operation came under fire last week, though, after airline SAS decided to drop its products on board. The reason: Mondelez has continued to operate three factories in Russia that according to newspaper Aftenposten generate estimated annual revenues of NOK 14 billion, and thus arguably contribute to financing Russian President Vladimir Putin’s war on Ukraine. That landed Mondelez on Ukraine’s blacklist of companies that support Russia’s economy.

SAS’ Freia boycott spread quickly to rival airlines Norwegian and, on Monday, Widerøe. By Friday Norway’s national football federation NFF had halted sales of Freia products at its kiosks at Ullevaal Stadium in Oslo. DNT severed ties as well in a highly symbolic move that has halted years of cooperation that benefited DNT and gave Freia lots of free advertising: DNT promoted its Kvikk Lunsj chocolate wafer bars to hikers, while Kvikk Lunsj wrappers promoted DNT and safety rules for both hiking and skiing.

The boycott spread through the weekend with the coastal voyage firm Hurtigruten (no longer Norwegian-controlled itself) joining in along with Oslo-based hotel chain Strawberry (formerly Nordic Choice), which no longer will offer Freia products. Other Norwegian firms including ice cream maker Hennig-Olsen sought meetings with Freia’s management. Major retailers were left pondering the issue, with grocery store chain Coop calling for advice from the Norwegian government, which otherwise has continued to condemn Russia’s war on Ukraine and extend enormous amounts of aid to Urkaine.

On Monday Prime Minister Jonas Gahr Støre seemed to avoid taking a stand on the boycott. “When it comes to what products people buy, that must be up to the people themselves,” Støre told state broadcaster NRK. He added that his government will continue to make sure sanctions against Russia are followed: “That’s our responsibility.”

Various government ministries had already claimed that Norwegian companies and consumers must decide for themselves whether to boycott Freia. The trade ministry referred questions to the foreign ministry, which in turn called upon companies and consumers to “make their own ethical decisions.”

Freia’s iconic logo and clock has also long dominated Karl Johans Gate, Oslo main boulevard through the heart of the Norwegian capital . PHOTO:

Mondolez Norge, which runs Freia in Norway, issued a press release on Sunday in which it welcomed dialogue with the government to “clarify” its position on what it called “a complicated situation.” It planned to send letters to “all relevant ministries … to explain our position, propose meetings and offer any additional information requested.”

The company further stated that “we don’t sell products in Norway that are produced in Russia,” while also noting that several other international firms that are behind “a considerable portion” of products sold in Norway continue to maintain operations in Russia without violating sanctions. Mondelez claims it isn’t violating sanctions either.

Mondolez Norge stressed that Freia is “a Norwegian brand” of items “produced with Norwegian milk” at its historic factory in Oslo’s Rodeløkka district. The original Freia factory was well-known for decades as a socially conscious workplace that hired Edvard Munch to decorate its company canteen with murals and established a park outside the factory that traditionally opened to the public for concerts during the summer. Now around 130 employees still working at Freia’s factory in Oslo fear layoffs.

Some Norwegian financial analysts are questioning the boycott and suggest Freia is being wrongly singled out. “Those boycotting (Freia) are doing so because Mondelez has operations in Russia,” Robert Næss, investment director at Nordea, told newspaper Dagens Næringsliv (DN), “but if you follow that reasoning, many other companies pop up, too, so why choose just Freia and Mondolez then?”

Other companies maintaining operations in Russia include PepsiCo, Unilever, Yves Rocher and L’Oreal, without them being boycotted in Norway, at least not yet. Næss noted that Mondolez is also behind products ranging from Philadelphia cream cheeses to Oreo cookies that are also sold in Norway. Only Freia products like its milk chocolate, Kvikk Lunsj chocolate wafer bars, bags of Twist candy, boxes of Kong Haakon chocolates and Daim seem to be targeted.

Freia’s Kvikk Lunsj chocolate wafer bars have long poured out of a backpack and been given away at the biannual launch of a hiking program in the Oslo area called Kjentmannsmerket. The candy bars have become synonomous with what hikers and skiers should have in their backpacks, benefiting both sports organizations and providing free advertising for Freia. PHOTO: Møst

Helge Thorbjørnsen, a professor at the Norwegian business school NHH, told DN that he also thinks the boycott is somewhat selective and not entirely based on principles. “Companies (like Strawberry and SAS) can create some goodwill by publicly boycotting products that don’t cost them much,” he told DN, adding that he seeks better clarification for the boycott.

SAS spokesperson Alexandra Lindgren Kaoukji said the airline is simply responding to an official blacklist of companies issued by Ukrainian authorities. It includes (in addition to Mondelez, Unilever, PepsiCo, Yves Rocher and LÓreal)    Philip Morris, Danone, Nestlé, Mars, Procter & Gamble, Carlsberg, GlaxoSmithKline and Rockwool. A Norwegian Air spokesperson, meanwhile, told DN the airline planned to conduct a review all its suppliers with regards to sanctions against Russia.

Norway’s huge sovereign wealth fund known as the Oil Fund, meanwhile, held a bit over 1 percent of the stock in Mondelez worth an estimated NOK 9.5 billion at the end of last year. “We’re following the situation,” an Oil Fund spokesperson told business news service E24. “We have a tight dialogue with the company on the topic.” Berglund



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