Russia has placed the local operations of Swiss food giant Nestle S.A., along with French retailers Auchan and Leroy Merlin, under temporary external management, marking another move by the Kremlin to take control of foreign corporate assets in the country.
In response to the transfer of operational control to an external administrator, Nestle confirmed on Friday that it is currently assessing a range of response options for its Russian subsidiary. The company stated it would take all necessary measures to protect its legal rights, ensure the continuity of its business operations, and safeguard the interests of all stakeholders, particularly its employees.
The development follows a presidential decree issued on Thursday, extending Russia's temporary management framework to include these companies. The parent company of Auchan and Leroy Merlin, Adeo Group, did not immediately respond to requests for comment on the matter.
This latest action is rooted in legislation enacted by Russia in 2023, which authorizes the state to impose temporary controls over the assets of companies and individuals from countries designated as "unfriendly." The Russian government has previously utilized this decree to seize control of assets belonging to French dairy firm Danone, Danish brewer Carlsberg, and utility operations owned by German and Finnish companies.
Both Danone and Carlsberg completed the sale of their respective Russian businesses in 2024, enduring significant financial losses as they exited the market to escape the uncertainty surrounding the seizure of their local assets. JPMorgan analysts noted in a client research report that Nestle's current situation mirrors that of Danone in 2023, raising questions about the potential value that could be realized from a sale of its Russian assets.
Nestle, like other international consumer goods companies, did not fully withdraw from the Russian market following the outbreak of the conflict in Ukraine in 2022. However, the company has gradually scaled back its local operations amid mounting pressure from politicians, employees, and consumers. According to its latest annual report, Nestle still operates six factories in Russia as of 2025.
In a related development earlier this year, British consumer goods company Reckitt announced it had agreed to sell its Russian hygiene business to local manufacturer Arnest Management, though the transaction value was not disclosed. Arnest, a Russian producer of perfumes, cosmetics, and household products, also acquired the Russian operations of British consumer goods giant Unilever in 2024.
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