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- Nestlé is assessing its options after Russia placed the Swiss food giant’s local assets under temporary external administration.
- The move could pave the way for Kremlin-friendly investors to take control of Nestlé’s Russian business, alongside assets linked to Auchan and Leroy Merlin.
- Moscow has seized dozens of Western corporate assets since Putin introduced the legal framework in 2023, including businesses owned by Carlsberg, Danone and Fortum.
Boxes of cereal manufactured by Nestle SA sit on shelves amongst other goods inside an Essen hypermarket operated by ZAO Essen Production AG, in Naberezhnye Chelny, Russia, on Saturday, Aug. 27, 2016.Bloomberg | Bloomberg | Getty Images
Swiss food giant Nestle said Friday it’s weighing its options after the Kremlin moved to place the Russian assets of its business under temporary external administration, as part of a renewed push against Western businesses still operating in the country amid the Ukraine war.
The maker of Nescafé coffee and KitKat chocolate bars said that it took note of the Russian presidential decree, which was published on the country’s official legal portal on Thursday, and is “assessing the situation.”
Russian President Vladimir Putin‘s surprise move is widely regarded as the first step toward passing the assets into the hands of Kremlin-friendly investors.
“Nestlé is committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees,” the company said in a statement.
Shares of Nestle traded 2.2% lower on Friday morning.
French retailer Auchan and Lemano Pro, the former Russian arm of French DIY retailer Leroy Merlin, were also targeted by the decree, with Russian assets of the companies set to be transferred to a shell company called L.E.V. Management.
Spokespeople for Auchan and Lemano Pro were not immediately available to comment when contacted by CNBC on Friday.
“Right now, we’re talking specifically about introducing external management; no other decisions have been made yet,” Kremlin spokesperson Dmitry Peskov said on Friday, according to news agency RIA Novosti.
Putin signed a decree in 2023 giving Moscow the authority to place property belonging to people or entities from so-called “unfriendly” countries under temporary administration.
The country has since taken control of local units from dozens of companies, including Danish brewer Carlsberg, French food producer Danone and Finnish utility Fortum.
Switzerland, which is not a member of the European Union, has largely adopted the EU’s sanctions against Russia since Moscow’s full-scale invasion of Ukraine in early 2022. The move has prompted an initiative that calls for a stricter interpretation of the country’s longstanding approach to neutrality, with Swiss voters set to decide on the proposal later this month.
Russia has said it no longer views Switzerland as a neutral state and sharply criticized the country for providing humanitarian aid to Ukraine.
