In a significant escalation of economic retaliation, Russian authorities have seized the assets and operations of Swiss food giant Nestlé, alongside three major French corporations. The Kremlin’s decree places these foreign-owned entities under the temporary administration of a Russian state-linked firm, citing Western military and economic support for Kyiv as the primary driver.
Kremlin Targets Western Companies
The directive, signed by President Vladimir Putin on Thursday, transfers Nestlé’s Russian subsidiaries, including Nestlé Russia and Nestlé Kuban, to LEV Management. This entity is headed by a former Interior Ministry major general, who now holds operational control over the seized assets. Kremlin spokesperson Dmitry Peskov confirmed on Friday that the move targets firms from “unfriendly countries” in direct response to their backing of Ukraine.
This decision impacts Nestlé's substantial Russian presence, which includes six manufacturing facilities producing coffee, pet care products, and infant formula, employing approximately 7,000 workers.
Nestlé Responds, Markets React
In a statement, Nestlé acknowledged the situation, stating the company is “assessing the situation and its options.” It reiterated its commitment to protecting its rights and ensuring business continuity for all stakeholders, particularly its employees.
Financial markets reacted swiftly to the news. Nestlé shares saw an immediate drop of over 1.7% to 77.01 CHF during early trading on the Zurich stock exchange. Analysts estimate that a complete write-off of Nestlé’s Russian assets and non-repatriated capital could result in a financial hit of approximately 1 billion Swiss francs ($1.2 billion).
French Firms Also Affected
The decree extended beyond Nestlé to include major French corporate holdings. Retail chain Auchan, DIY supplier Lemana Pro (formerly Leroy Merlin), and logistics group FM Logistic have also had their Russian units placed under temporary administration. While parent companies technically retain ownership, the decree effectively blocks them from making strategic or operational decisions regarding these units.
Pattern of Expropriation
This move by Moscow mirrors previous expropriations, such as the 2023 takeovers of French food giant Danone’s Russian operations and Danish brewer Carlsberg’s Baltika unit. Analysts note that these “temporary administrations” have historically served as a precursor to forced asset sales at steep discounts to Russian buyers, effectively nationalizing foreign businesses.
Following the 2022 invasion of Ukraine, Nestlé had already curtailed advertising, non-essential imports, and capital investments in Russia, though it continued to supply essential food and infant nutrition products. The Russian market currently accounts for about 1% of Nestlé's global group sales, a decrease from 2% before the conflict.