Russia has placed the local assets of food giant Nestle and French retailer Auchan under temporary control. This move is seen as the country's most significant action against Western companies since seizing Danone's and Carlsberg's Russian businesses in 2023. The assets were transferred to temporary control by L.E.V. Management, a little-known company with no public profile, under a decree issued by Russian President Vladimir Putin.
The Kremlin said actions by countries it considers "unfriendly" played a role in the decision. Kremlin spokesman Dmitry Peskov stated that these states were "currently involved in the most active manner in military actions against our country". Peskov did not name France or Switzerland, but Russia views Western countries supplying weapons to Ukraine, including France, as effectively parties to the conflict.
The Swiss government expressed concern over the move and said it was supporting Nestle in efforts to have it reversed. Nestle said it was assessing the situation and committed to taking all necessary steps to protect its rights and ensure continuity of business operations. The company has six factories in Russia producing coffee, pet care, and infant formula products and employs about 7,000 people.
Nestle's Russian operations generated about two billion Swiss francs ($2.4 billion) in sales in 2021. The company has since scaled back its Russian operations, suspending most sales, non-essential imports and exports, advertising, and capital investment. Bank Vontobel analyst Jean-Philippe Bertschy estimates that Russia now accounts for around one percent of Nestle's group sales.
Auchan operates 230 stores and an online business in Russia and employs about 30,000 people. The company declined to comment on the situation. Russia has progressively tightened control over foreign-owned assets since its 2022 invasion of Ukraine. A decree signed by Putin in 2023 allows assets belonging to companies from countries Moscow considers "unfriendly" to be placed under temporary administration.
In previous cases, temporary administration has often been followed by state expropriation, with assets later transferred to Kremlin-linked individuals or companies. Peskov said only temporary administration was being considered for now. A 2025 estimate by the Moscow law firm NSP put the amount of private property seized by the Russian state since the start of the war at more than $50 billion.
The move has had a limited financial impact on Nestle, with shares down 2.4 percent at 1340 GMT. The company is committed to protecting its rights and ensuring continuity of business operations. The Russian government's actions have raised concerns about the future of Western businesses in the country.
Key points
- Russia places Nestle and Auchan assets under temporary control
- The move is seen as a significant action against Western companies
- The Russian government cites actions by "unfriendly" countries as a reason for the decision
