Nestlé running its Russian business as normal despite forced administration

Nestlé continues to run its Russian business as normal despite being placed under compulsory administration Keystone-SDA

The Swiss food giant Nestlé says it is continuing to operate its business in Russia without restrictions, despite being placed under court-ordered administration.

The food group will fulfil its obligations to customers, partners and employees “in full”, the Russian Nestlé company said.

The transfer of the company’s shares to the Russian administrator L.E.V. Management does not constitute either nationalisation or a change of ownership, the company said in a statement. The group also expressed confidence that collaboration with the new administrator would contribute to the further development of the business and to greater efficiency.

Last week, Russian President Vladimir Putin placed the shares in Nestlé Russia and Nestlé Kuban under the temporary administration of L.E.V. Management. Nestlé therefore remains the formal owner but has, for the time being, lost control of the holdings.

It’s unclear how long this situation will last. Observers view such compulsory administration as a possible first step towards expropriation or transfer to Russian owners. In previous cases, foreign companies such as Danone and the Carlsberg brewery group were also initially placed under temporary administration. Their Russian operations were later transferred to Russian buyers.

On Friday, Nestlé stated that it was assessing the situation and its options for action. The group operates six production sites in Russia.

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Translated from German, reviewed by an English Department journalist.