Swiss food giant Nestle announced on Friday that it is evaluating its position after the Russian government placed its local assets under temporary external administration. The directive marks a significant escalation in the Kremlin’s crackdown on remaining Western corporate interests amid the ongoing conflict in Ukraine.
The presidential decree, published Thursday on Russia’s official legal portal, assigns the management of Nestle’s Russian operations to an external administrator. Market analysts and diplomats widely view this step as the initial phase in transferring control of the assets to investors loyal to the Russian state. The move also targets French retailer Auchan and Lemano Pro, the former Russian subsidiary of French home improvement chain Leroy Merlin, whose assets are being routed to a shell entity named L.E.V. Management.
In a statement, Nestle affirmed its commitment to protecting its rights and ensuring business continuity for all stakeholders, with specific emphasis on its employees. “Nestlé is assessing the situation” following the decree, the company said.
Kremlin spokesperson Dmitry Peskov clarified the scope of the action during a Friday briefing. “Right now, we’re talking specifically about introducing external management; no other decisions have been made yet,” Peskov told reporters, according to RIA Novosti. Spokespeople for Auchan and Lemano Pro were not immediately available for comment.
Following the announcement, Nestle shares declined 2.2% in morning trading. This development follows a pattern established since President Vladimir Putin introduced the legal framework for asset seizures in 2023. Moscow has since taken control of dozens of Western corporate assets, including operations previously owned by Carlsberg, Danone, and Fortum.
Nestle shares dipping 2.2% seems like a mild reaction. The real cost here is the precedent set for all remaining Western businesses.
Does anyone know if this external administration affects employee contracts? That must be incredibly stressful for the local staff right now.
Peskov says ‘no other decisions made yet,’ but history shows this is just the first step. Total nationalization follows quickly.
I’m genuinely surprised they haven’t already exited completely. Why stay and risk total seizure instead of cutting losses earlier?
Another day, another Swiss company swallowed by the Kremlin. How much longer can Nestle realistically operate here?