HomeBusinessMoneyCustomers clamour for boycott of Holland & Barrett over oligarch

Customers clamour for boycott of Holland & Barrett over oligarch

Angry customers have taken to social media to call for a boycott of Holland & Barrett over its links to oligarch Mikhail Fridman, who has been sanctioned by the European Union. 

The chain, which bills itself as the UK’s leading health and wellbeing store, has been on the high street for 152 years. However, few customers who snap up its ‘buy one, get one for a penny’ offers realise it is owned by private equity firm LetterOne, founded by Fridman and in which he holds a major stake. 

Shoppers on Twitter threatened to buy supplements elsewhere after discovering the ownership of the chain. One tweeted: ‘Please boycott Holland & Barrett as it is owned by a Russian oligarch with links to Putin.’ 

Bitter pill: Holland & Barrett’s 1,600 UK stores are owned by LetterOne, founded by Mikhail Fridman

Another added: ‘There’s nothing healthy about Holland & Barrett, owned by Mikhail Fridman, an oligarch and Putin crony.’ A third tweeted: ‘Boycott Holland & Barrett. It sounds so wholesome, so English. It’s not.’ While another declared: ‘Boots it is then.’ 

‘Get your cashews elsewhere,’ suggested one customer, a sentiment echoed by another who tweeted: ‘Best steer well clear.’ 

Holland & Barrett has 1,600 stores and 7,000 staff who could be the victims of any boycott. Clive Black, a retail analyst at asset manager Shore Capital, said: ‘Boycotts can hit the company’s bottom line which can affect jobs.’ 

Critics said the chain’s oligarch ownership was jarring and suggested it could be damaging for the business. Black added: ‘The juxtaposition between an oligarch owner in the current climate and customers in the UK buying wellbeing products could not be wider.’ Fridman, 57, was born in Lviv in Ukraine and also has Russian and Israeli citizenship. He founded Alfa Bank, one of the largest in Russia, and was also one of the four oligarchs involved in TNK-BP, a joint venture with the UK oil giant. 

The tycoon was last weekend sanctioned by the European Union, freezing his assets and banning him from travelling within the bloc.

His supporters said he was deeply distressed over the possible fate of Lviv, the city where he grew up, and that one of his biggest fears was now appearing on the sanctions list in the UK, the country he calls home. 

He is the owner of Athlone House, a sprawling £65million mansion in Highgate, North London. 

Fridman last week spoke out against the fighting in Ukraine but refused to denounce Putin. He has stepped down from the board of LetterOne, which is now being run by his British lieutenant, Lord (Mervyn) Davies, a former Labour Minister and now a crossbench peer best known for his crusade to get more women into boardrooms.

Late on Friday night, Intermediate Capital announced that Davies would be leaving as chairman with immediate effect. The Mail on Sunday understands the board of the FTSE100 investment giant met within 24 hours of Davies’ promotion at LetterOne. 

Under pressure: Mikhail Fridman

Under pressure: Mikhail Fridman

Fridman’s stake in LetterOne, along with that of fellow oligarch Petr Aven, has been frozen, meaning he has no shareholder rights and cannot sell. He is also barred from the head office. But critics are not satisfied, as Fridman and Aven are still owners. 

Holland & Barrett itself is unlikely to face sanctions as the pair own just less than half the shares in parent company LetterOne. Fridman hastily convened a press conference last week, which was broadcast on television. However, the move backfired as it alerted Holland & Barrett shoppers to his connection with the stores, something of which they had previously been unaware. The reaction comes as Foreign Secretary Liz Truss faces mounting criticism over the length of time the Government is taking to sanction oligarchs. 

The UK lags far behind the US and EU, whose lists are significantly longer. So far the UK has sanctioned 11 oligarchs, while the European Union has 22 on its list. 

Former Brexit Secretary David Davis told The Mail on Sunday: ‘There are 140 possible targets that are not secret. We have imported a number of rich men and now we have to deal with it.’ 

Fridman made most of his £11billion fortune from oil, gas, banking and telecoms. He began his rise to riches in the 1980s when the Soviet economy opened up under general secretary Mikhail Gorbachev. 

After university in Moscow, he began a window-washing business and in 1989 established the commodity trading business Alfa-Eco. 

Using £75,000 of his profit he founded Alfa Bank in January 1991, which grew to become one of the largest private banks in Russia. 

Customers clamour for boycott of Holland & Barrett over oligarch

In 2013, he set up LetterOne in London using £11billion raised from the sale of his stake in TNKBP to Kremlin-backed oil giant Rosneft, whose petrol is currently fuelling Russian tanks. Fridman and Aven own just under 50 per cent of LetterOne. The rest of the company is split between board members German Khan, Alexey Kuzmichev and Andrei Kosogov – who all left the board last night. Fridman developed close links with the City establishment, hiring Lord Browne, the former boss of BP, as chairman of LetterOne’s energy interests. Browne stepped down late last year. 

Lord Davies was hired as deputy chairman of the group in 2015 and became chairman last week. 

LetterOne bought Holland & Barrett for £1.8billion in 2017 from US private equity group Carlyle.

A spokesman for LetterOne said: ‘Holland and Barrett is a fantastic business. The business employs thousands of people and we will do everything to protect them.’ 

Holland & Barrett’s latest results show that it made a gross profit of £445million for the year to the end of September 2020. It paid no dividend to its owners that year. However, since the acquisition LetterOne has taken £75.2million in dividends. 

Fridman and Aven said the EU sanctions are spurious and unfounded and vowed to contest them.

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