US firm NIQ under official US scrutiny due to subsidiary's operation in Russia's new regions
The Russian division of the US company NIQ, the world's largest consumer data analyst, has stepped up its operations in the Donetsk and Luhansk people's republics, and the Zaporozhye and Kherson regions in recent months. This is reported by the Financial Times.
This, the newspaper says, has caused the US company to come under "intense scrutiny". The company's actions have raised questions about its compliance with international sanctions and whether such business operations are allowable in US law, the FT points out.
In particular, the FT draws attention to a June publication by Nielsen Data Factory, the Russian division of NIQ, which stated that the company had for the first time estimated beer sales that included the new territories. The press release noted that new regions account for about 2-3% of beer sales. Before that, Nielsen had presented a rating of Crimean brands.
The FT recalls that the US in 2022 banned US citizens from doing business or investing in the new regions of Russia (with rare exceptions like food and pharmaceutical businesses). However, the US parent company could theoretically argue that its Russian subsidiary was doing business without its knowledge and without the involvement of US nationals, lawyers told the FT.
NIQ told the newspaper that the Russian division operates independently of the American company, its actions "are not the actions of NIQ", and its results are not included in the consolidated financial statements. According to documentation seen by the FT, the US Treasury has been asked to look into the matter, but there is no indication which documents are in question.
The FT claims that Moscow is allegedly "putting pressure" on foreign companies to expand into the new regions. In particular, according to one source, Russia had previously "treated this very cautiously," but earlier this year the approach changed.
The operation of foreign companies conducting marketing research has recently become severely restricted in Russia. This summer a law was passed to regulate the operation of research companies engaged in consumer market analysis. Now a foreign legal entity or a more than 20% foreign owned Russian company may not research commodity markets.
However, there are a number of exceptions. For example, the requirements do not apply to firms with revenues of up to RUB 800 million in the previous calendar year or if the research is conducted in the organiser's own interests and the research results are not to be passed on to other parties.
Nielsen Data Factory LLC had revenue of RUB 1.5bn and net profit of RUB 383.7m in 2024, according to the company's website.