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UK firm comes to rescue of Russia's dairy industry

London-listed Mondi had promised to leave the Russian market after the start of the war in Ukraine - Andy Wilson
London-listed Mondi had promised to leave the Russian market after the start of the war in Ukraine - Andy Wilson

A British firm helped Russia's dairy industry survive crippling Western sanctions after Vladimir Putin’s invasion of Ukraine, documents on Wednesday revealed.

When Russia’s milk producers were left crippled by the punitive measures, paper and packaging giant Mondi Group came to its rescue.

Russian food producers faced a crisis when Western sanctions prompted Swedish firm Tetra Pak, which provided seven out of ten milk and juice cartons, to quit the market.

With no other firm willing to fill the void, Mondi announced plans, in June, to begin production of packaging to ultimately replace Tetra Pak.

At the time, Victoria Abramchenko, a Russian vice prime minister, hailed the news and insisted the country would have no problem with food packaging moving forward.

London-listed Mondi had promised to leave the market after the start of the war in Ukraine, announcing the sale of its Syktyvkar pulp and paper mill.

But it only announced the deal to offload its largest asset in Russia last month, almost six months after the Kremlin ordered troops to topple Ukraine.

Several Western firms still operating in Russia

Viktor Kharitonin, a Russian billionaire who built multinational pharmaceutical business Pharmstandard with the former Chelsea FC owner Roman Abramovich, was lined up as the new owner.

Details of Mondi's continued participation in the Russian market, despite its pledge to leave, were highlighted in an analysis by Ukraine's Economic Security Council.

The documentation, seen by The Telegraph, revealed details of how at least 15 Western firms were still operating in Russia, many helping to provide hardware used by its military in Ukraine.

Klaus Peller, the head of Mondi's Russian operation, said that, according to the analysis, in June the firm's plant was the "only pulp and paper mill in Russia whose assortment has not changed at all in terms of quality" and its revenue had "remained at the same level".

In the same month, Mondi funded the "We are Russia! We are together!" Bicycle campaign, the document added.

In its analysis, Ukraine's Economic Security Council concluded that the Kremlin could have helped finance Mr Kharitonin's €1.5 billion purchase of Mondi's Russian assets.

"The price of Mondi SLPK slightly exceeds the total fortune of Kharitonin, which, considering his proximity to Russian authorities, drives the suggestions of governmental financial support in acquiring such a valuable asset, necessary to satisfy the packaging demand of the internal market," it said.

Elsewhere in its dossier on Western firms, a network of Swiss firms were also accused of still providing semiconductors critical for the maintenance of Russian satellite navigation systems that direct missiles into Ukraine.

And a group of German companies were revealed as producing communication equipment and spare parts for Russian military vehicles, co-operating with sanctioned firms Rostec, Roskomos and Almaz Antey.