NEW YORK, June 28 (Reuters) - Russians are still

indulging in foreign-made Toblerone chocolate, according to

internal sales documents seen by Reuters, showing the difficulty

of U.S. manufacturer Mondelez's ( MDLZ ) plan to isolate its

business in the country from its global operations.

Facing continuing pressure from employees, activists and

investors to leave Russia, Mondelez ( MDLZ ) planned to make its business

there "standalone with a self-sufficient supply chain" by the

end of last year. It told Reuters in February that products in

Russia were made and distributed locally, with "no imports of

finished goods from Europe into Russia or exports from Russia

into Europe."

But, high-end Toblerone chocolate is made in Switzerland

and Slovakia, and the sales documents viewed by Reuters indicate

that 100 tons of it were sold in Russia in the first four months

of this year, although volumes were down 12% from a year

earlier.

The continued sales of the triangular chocolate bars, a

shape reminiscent of the peaks of the Swiss Alps, show the

challenges of removing Russia from the rest of Mondelez's ( MDLZ )

business.

Food including chocolate does not fall under the

multitude of sanctions imposed by Western countries aimed at

punishing Russia after it invaded Ukraine in 2022. Since then,

many companies have pledged to either exit the country or sell

or wall-off their Russian operations.

Mondelez ( MDLZ ) said in a statement that it is possible that

"branded products could be entering Russia through third-party

distributors or brokers," grey market importers looking to

capitalize on demand for Western brands that retreated after the

war.

Russia previously said it would allow imports without the

trademark owner's permission.

BILLION-DOLLAR BUSINESS

The country remains a significant part of Mondelez's ( MDLZ )

business. The company's revenues in Russia accounted for 2.9%,

or about $1 billion, of its $36 billion in global sales last

year.

Reuters found Toblerone bars on shop shelves in Moscow and

St. Petersburg with packaging saying they were made in

Mondelez's ( MDLZ ) factory in Bern, Switzerland on November 23. A 100

gram bar was for sale for 175.99 roubles ($2.02 U.S. dollars).

To stop third-party distributors or brokers from selling

Toblerone in Russia, Mondelez ( MDLZ ) could file lawsuits against them

and retailers stocking the chocolate in Russian courts over

trademark infringement, said Peter Maggs, a research professor

at the University of Illinois College of Law and expert on

Russian law.

"For the poor company, it's like a whack-a-mole system, if

there's a demand, various people will be bringing the stuff in,"

Maggs said. "Unlike bringing in narcotics, you're not going to

get stopped at customs" for chocolate.

"It's really up to the company to enforce it," he added.

Mondelez ( MDLZ ) declined to provide additional comment.

In another bid to separate Russia, Mondelez ( MDLZ ) earlier this

year appointed a new general manager to lead the country as a

"standalone organization" but he reports to another executive

who reports to the president of Europe.

The Russian business and its employees are also still

entangled in some ways with the rest of Mondelez ( MDLZ ). A source

familiar with the matter who is not authorized to speak to media

and could not be named said that Mondelez's ( MDLZ ) Russian business

still uses the company's enterprise resource planning (ERP)

system, a central planning tool.

The source also said that Russian employees working for the

Russian business also attend meetings with employees from other

regions.

PROFITS DOWN

The internal sales documents show that Mondelez's ( MDLZ ) gross

profit and net revenue on Toblerone in Russia fell in the first

four months of this year compared to the same time last year.

Revenue on Milka chocolate in Russia is up 5.2% in the same

time period, according to the documents, while volumes and gross

profit on the cheaper chocolate brand have fallen.

Mondelez ( MDLZ ) manufactures Milka in its factory in Pokrov,

located about 60 miles east of Moscow, according to a

translation of its Russian website.

Mondelez ( MDLZ ) said last June that it was expecting volume and

sales declines in Russia in part because it stopped advertising

and launching new products there.

Mondelez's ( MDLZ ) Russian business is still top of mind for some of

its investors. At its annual meeting in May, a little over 30%

of them backed a shareholder resolution calling for the company

to conduct an independent study of the risks of continuing to do

business in Russia, a move the company opposed.