Russia Seizes Nestlé's Local Subsidiary Under Temporary Management Decree

The Russian government has effectively seized the local subsidiary of Nestlé, the Switzerland-headquartered global food giant.

Since the outbreak of the war in Ukraine, Russia has placed several Western companies operating locally under government control and subsequently sold them off at bargain prices.

According to Bloomberg and other outlets, Russian President Vladimir Putin signed a decree on the 17th local time placing the local entities Nestlé Russia and Nestlé Kuban under the temporary management of a Russian company named L.E.V. Management.

The targets of temporary management also included French supermarket chain Auchan.

The daily Kommersant reported that a company named KS Logistika had previously requested the government to take such measures against Nestlé on the grounds that it did not expand its production facilities in Russia and suspended product exports.

Nestlé operates six factories in Russia, producing coffee, confectionery, baby food, and pet food.

Even after the outbreak of the war in Ukraine in 2022, it did not withdraw, citing the justification of supplying essential foodstuffs to residents in conflict zones.

Its sales in Russia account for about 2 percent of its total, and it employs approximately 7,000 local staff.

Auchan, which entered the Russian market in 2002, operates 230 stores and employs about 30,000 people.

In retaliation against Western sanctions, Russia established a system in 2023 under which the government temporarily manages assets related to so-called unfriendly nations.

Western countries view that Russia uses this system to semi-forcibly hand over companies to pro-government firms.

Previously, the local subsidiaries of Danish brewer Carlsberg's Baltika Breweries and French dairy company Danone were placed under the temporary management of Russia's Federal Agency for State Property Management before being sold to Russian companies.

The Russian government has long been displeased with Switzerland, a neutral country that nonetheless complies with European Union (EU) sanctions against Russia.

Nestlé stated, "We will take all necessary measures to protect our rights and ensure business continuity for the benefit of all stakeholders, especially our employees."

(Photo: Capture from the Nestlé Korea homepage)
※ Please note: This article was translated by AI and may contain errors.