Russian President Vladimir Putin has signed a decree placing the Russian assets of Swiss food giant Nestlé under temporary administration, escalating Moscow’s intervention in the operations of Western companies that remain in the country.
The decree, reported on Thursday, September 17, transfers Nestlé’s Russian assets to L.E.V. Management, a Russian company. The same decree reportedly places the Russian subsidiary of French retailer Auchan under the company’s temporary management.
The move comes about a month after a Russian company, KS Logistika, asked Putin to place five Nestlé-owned entities in Russia under temporary administration.
At the time, Nestlé said it had not been contacted by Russian authorities regarding the request and that it continued to operate its offices and factories in the country while complying with Russian regulations.
Russia’s Temporary Administration Mechanism
Russia introduced the temporary-administration mechanism after the invasion of Ukraine, giving the government powers to take control of assets belonging to companies from countries Moscow considers “unfriendly.” Putin signed a decree in April 2023 establishing the framework for the temporary administration of certain foreign-owned assets.
The mechanism has previously been used against major Western companies, including French food producer Danone and Danish brewer Carlsberg, as Moscow increased its control over foreign-owned businesses following the withdrawal or scaling back of international companies.
Nestlé has continued operating in Russia despite reducing parts of its business following the start of the war in Ukraine. The company has maintained that it supplies essential food products to the Russian market.
The earlier request by KS Logistika was linked, according to reporting cited by Reuters, to Nestlé’s decision not to expand production capacity in Russia and to stop exports of products manufactured at its Russian factories.
Nestlé operates several production facilities in Russia and has a substantial local business producing food and beverage products.
