Russia seizes control of Nestlé subsidiaries

Putin places Russian Nestlé holdings under external administration Keystone-SDA

Swiss food giant Nestlé is losing control of part of its Russian business. Russian president Vladimir Putin has placed two Nestlé companies under Russian control.

A decree issued on Thursday stated that shares in Nestlé Russia and Nestlé Kuban would now be managed by the Russian firm LEV Management. The presidential order also applies to French supermarket chain Auchan.

Although Nestlé remains the owner of its subsidiaries, it cannot make decisions regarding these holdings for the time being.

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When asked by the AWP news agency, a Nestlé spokesperson was initially unable to provide any details on the exact consequences.

In August, the Russian company KS Logistika had called on Putin to place five Russian Nestlé subsidiaries under external administration. At the time, Nestlé stated that it had not been contacted by state authorities.

The company added that a withdrawal from Russia was not on the cards.

Nestlé generates around 2% of its group turnover in Russia. The company operates six production sites in Russia, where it manufactures, amongst other things, coffee, confectionery, baby food and pet food.

Following Russia’s military invasion of Ukraine in February 2022, Nestlé decided not to completely cease its operations in Russia, despite criticism. The group justified this at the time by stating that, as a food manufacturer, it wished to continue supplying the population with essential foodstuffs, even in conflict regions.

Danone and Carlsberg as role models

Russia has been using the instrument of temporary administration since 2023 to take control of foreign companies’ assets. Nestlé is by no means an isolated case.

For instance, the French food group Danone lost control of its Russian operations as early as 2023. Danone eventually sold them in 2024 for around 180 million euros and recorded a total loss of 1.2 billion euros.

The Danish brewing group Carlsberg faced a similar fate. Its Russian operations were also placed under Russian state administration in 2023. At the end of 2024, Carlsberg completed its withdrawal through a management buy-out worth 320 million dollars. The Dutch brewer Heineken, for its part, sold its Russian subsidiary for the symbolic price of one euro and recorded a total loss of 300 million euros.

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Translated from German, reviewed by an English Department journalist.