PepsiCo becomes largest food business in Russia
PepsiCo, the global giant behind the likes of Pepsi-Cola, Tropicana and Gatorade, has become the largest food-and-beverage business in Russia following the acquisition of a majority stake in Wimm-Bill-Dann Foods.
The deal has been valued in the region of $3.8bn and gives PepsiCo an approximate 66% stake in the Russian company.
Speaking in Davos after the deal was approved by the Russian Monopolies Commission yesterday, Indra Nooyi, chief executive of Pepsico admitted to feeling "fantastic", and said it will significantly move the Eastern European market up the company's pecking order.
She said: "We think Russia's a terrific market. First, besides the fact that Russia is located where it is, it's the gateway to Central Europe and Eastern Europe. Four hundred million people can be served out of Russia."
PepsiCo's leader went on to praise the talented and technical workforce in Russia before pledging to invest $1bn in the country in 2011.
Nooyi said: "The Russian government is very open to foreign investment. We have unprecedented access to everybody in the government and they really reach out if we have a problem and address it."
Nooyi downplayed any problems of corruption in the country, claiming the company had never experienced any major issues.
The global company's move into Russia, which charges no corporation tax, comes as some multinationals are fleeing the UK after citing crippling tax burdens on foreign revenues.
WPP's Martin Sorrell, the marketing group responsible for the British Government's own media planning and buying business, has saved approximately £50m per year since moving its head quarters to Ireland in 2008.
PepsiCo claims to have been the first American company in Russia when it entered the market 50 years ago.
The latest acquisition will boost its annual global revenues from nutritious and functional foods from approximately $10bn today to nearly $13bn. it previously stated its strategic goal of building a $30bn nutrition business by 2020.
This footage is made available to Marketing from CNBC, reporting from the World Economic Forum Annual Meeting in Davos, Switzerland. Visit davos.cnbc.com.
This article was first published on marketingmagazine.co.uk
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