Valio, the Finland-based dairy company, has sold its assets in Russia to local food manufacturer Velkom Group.

In the wake of Russia’s invasion of Ukraine, Valio was among the overseas food businesses that stopped operating in protest at the war.

“Russia’s attack on Ukraine made it impossible to continue our operations in Russia, both ethically and from a business perspective,” Valio CEO Annikka Hurme said today (26 April). “Exiting from Russia has proved difficult in this situation because of the constantly changing legislation and the reciprocal sanctions. We have sought out solutions and a suitable buyer throughout spring. With the transaction, we will complete this process and our operations in Russia will end.”

Financial terms were not disclosed. The deal includes a cheese-making in Ershovo, 40 miles west of Moscow and local cheese brand Viola.

Valio said products sold under its namesake brand in Russia will continue to be on shelves until inventory is run down. Under the terms of the deal, Velkom Group will not be able to sell brands not included in the transaction after the end of this year.

The Valio brand will still be seen on store shelves in Russia until the packaging materials have been depleted and product expiration dates have been reached. The buyer must stop using the brands sold in Russia that are not included in the transaction by the end of the year within the framework of the transition period.

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Valio said it generated net sales of EUR87m in Russia in 2020, which equated to around 5% of the company’s overall sales. It did not disclose sales figures for 2021.

The business stopped the exporting of lactose-free milk, baby food and plant-based alternatives to Russia on 4 March. Three days later, it announced it would close down its operations in the country.

Valio’s Nordic peers Arla Foods and Fazer Group are also among the food manufacturers to have stopped doing business in Russia.

NestléPepsiCoUnileverDanoneMars and Mondelez International are among those to have announced they are to suspend their investment in Russia but maintain the manufacturing and sale of certain food products.

For more on Just Food’s coverage on how the conflict is affecting the food industry, please visit our dedicated microsite.

Just Food parent GlobalData is providing an ongoing analysis of the war’s impact across business sectors.