Putin takes temporary control of assets of Nestlé, Auchan and other Western companies in Russia
The Kremlin justified the measure against the companies on the grounds that they come from countries Moscow considers "unfriendly."
Nestlé headquarters
Russian President Vladimir Putin placed the Russian-based assets of Swiss company Nestlé and several others linked to French groups, including Auchan, FM Logistic and the former operations of Leroy Merlin, in a new move by Moscow targeting Western companies since the start of the war in Ukraine.
The decree, signed on Sept. 17, transfers management of these assets to the Russian company L.E.V. Management. The measure includes foreign stakes in Nestlé Russia and Nestlé Kuban, as well as virtually 100% of Auchan's Russian subsidiary and assets related to FM Logistic and Lemana Pro—the name under which the former Leroy Merlin network currently operates in the country—according to AFP.
The concept of temporary administration does not formally entail an immediate change in ownership, but it removes foreign shareholders from control of their businesses and places management in the hands of an administrator appointed by Russia. The mechanism stems from a decree approved by Putin in April 2023 to seize assets belonging to companies from countries considered by Moscow to be "unfriendly."
The Kremlin defended the decision on Friday, specifically citing the origin of the companies in countries that Russia has classified as "unfriendly"—a designation Moscow uses against governments that have imposed sanctions over the invasion of Ukraine .
Nestlé is considering how to respond
Nestlé confirmed on Friday that it had taken note of the presidential decree and stated that it is analyzing the situation and its possible options.
The company stated that it will take the necessary measures to "protect its rights" and ensure the continuity of its operations, particularly with regard to its employees.
The Swiss multinational operates six plants and employs around 7,000 people in Russia. Since the start of the war, it has significantly scaled back its activities in the country, suspending investments and limiting some of its sales, imports and exports. Russia currently accounts for about 1% of the group's global sales, according to analyst estimates cited by Reuters.
Auchan remains one of the major foreign retailers operating in the Russian market. The company has maintained its operations since 2022 and has more than 200 stores in the country and tens of thousands of employees.
A little-known company will take over management
According to business records cited by Vedomosti and other Russian media outlets, the firm has a registered capital of just 15,000 rubles ($178.25) and showed no significant business activity until 2025. Andrei Krayushkin has been its CEO since September of this year.
Novaya Gazeta Europe has noted that Krayushkin's name and date of birth match those of a major general in the Russian Ministry of the Interior who previously held a senior position in the migration department.
Moscow steps up pressure on Western companies
This intervention is part of a series of measures Russia has taken against foreign companies since 2022.
In 2023, Moscow placed assets of companies such as Danone and Carlsberg under temporary administration. In several cases, these interventions subsequently resulted in sales or transfers to Russian investors, while Western companies faced significant discounts and levies in order to exit the market.
Russia has progressively tightened the conditions for Western companies seeking to withdraw from the country, including government approvals, mandatory sales discounts and exit taxes.
The new decree reinforces this strategy and expands the number of large international companies whose businesses have come under the control of government-appointed administrators, more than four years after the start of Russia's invasion of Ukraine.
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