Putin targets Nestle’s Russian business as Kremlin tightens grip on Western assets
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Swiss food giant Nestle said Friday it’s weighing its options after the Kremlin moved to place the Russian assets of its business under temporary external administration, as part of a renewed push against Western businesses still operating in the country amid the Ukraine war.
The maker of Nescafé coffee and KitKat chocolate bars said that it took note of the Russian presidential decree, which was published on the country’s official legal portal on Thursday, and is “assessing the situation.”
Russian President Vladimir Putin’s surprise move is widely regarded as the first step toward passing the assets into the hands of Kremlin-friendly investors.
“Nestlé is committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees,” the company said in a statement.
Shares of Nestle traded 2.2% lower on Friday morning.
French retailer Auchan and Lemano Pro, the former Russian arm of French DIY retailer Leroy Merlin, were also targeted by the decree, with Russian assets of the companies set to be transferred to a shell company called L.E.V. Management.
Spokespeople for Auchan and Lemano Pro were not immediately available to comment when contacted by CNBC on Friday.
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Read more of CNBC’s Russia-Ukraine coverage:
- Putin braces for election stress test as Russians ‘feel the pain’ of struggling economy
- Ukraine says it’s open to halting attacks on Russian energy after Trump’s claims of deal
- Trump urges Ukraine to stop ‘knocking out’ Russian oil refineries as U.S. diesel hits record
- Putin floats ‘chance’ at peace with Ukraine as NATO chief warns Russia is becoming ‘increasingly reckless’
- Russia preparing ‘massive strikes’ on Ukraine’s energy sites after deadliest attack of the year
- Russia’s economy has defied the skeptics. Cracks are getting harder to hide
- ‘Winter is coming’: Ukraine fears its toughest test since Russia’s full-scale invasion
“Right now, we’re talking specifically about introducing external management; no other decisions have been made yet,” Kremlin spokesperson Dmitry Peskov said on Friday, according to news agency RIA Novosti.
Putin signed a decree in 2023 giving Moscow the authority to place property belonging to people or entities from so-called “unfriendly” countries under temporary administration.
The country has since taken control of local units from dozens of companies, including Danish brewer Carlsberg, French food producer Danone and Finnish utility Fortum.
Switzerland, which is not a member of the European Union, has largely adopted the EU’s sanctions against Russia since Moscow’s full-scale invasion of Ukraine in early 2022. The move has prompted an initiative that calls for a stricter interpretation of the country’s longstanding approach to neutrality, with Swiss voters set to decide on the proposal later this month.
Russia has said it no longer views Switzerland as a neutral state and sharply criticized the country for providing humanitarian aid to Ukraine.
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