Switzerland Criticizes Russia’s Nestle Grab, Seeks Reversal

(Bloomberg) — Switzerland said Vladimir Putin’s seizure of Russian assets belonging to Nestle SA is a worrying development and it’s working with the company to get the actions reversed.

The Russian president on Thursday ordered stakes in businesses of Nestle and French supermarket chain Auchan to be placed under temporary administration by a local company.

The Kremlin linked the actions to European military support for Ukraine. For Switzerland, it comes at a particularly sensitive time. The country is less than two weeks away from a national vote on its neutrality, where the result could affect Swiss sanctions on Russia.

Switzerland’s State Secretariat for Economic Affairs, speaking on behalf of the government, said in a statement that it’s “worried” about the seizure of Nestle’s assets. It’s working with Nestle “toward the reversal of the compulsory administration,” it said.

“The timing of the seizure of Nestle’s shares is certainly no coincidence,” said Ulrich Schmid, a professor at the University of St.Gallen.

“The Kremlin is sending the following message to Switzerland: If you hadn’t imposed sanctions on Russia, our economic relations would be untroubled,” he said.

The timing of the move will add to tensions between Switzerland and Russia. The Swiss initiative proposes imposing stricter rules on how the country applies its longstanding policy of neutrality. It would remove the current flexibility that enabled the government to mirror European Union sanctions on Russia in 2022 after the full-scale invasion of Ukraine.

The Kremlin recently weighed in on the vote, trying to sway voters by saying Switzerland abandoned neutrality with the sanctions move. Switzerland is on a list of countries that Russia deems “unfriendly.”

Eric Nussbaumer, a former senior lawmaker of the Social Democrats, called Russia’s move on Nestle “unjustified.”

“Apparently there’s resentment against Switzerland in high places in Russia,” he said. “I advise extreme caution when dealing with this regime.”

Nussbaumer, who was a foreign policy expert in Switzerland’s parliament for almost 20 years before he retired in April, doesn’t think that Moscow is trying to sway Switzerland’s neutrality vote later this month. Polls indicate that the proposal is likely to fail.

Swiss neutrality was enshrined at the Treaty of Paris in 1815, and has been a core element of the country’s foreign policy since the founding of the modern Swiss Confederation in 1848.

While neutrality is a strongly held tradition, the Swiss have adapted it as times have changed, including after the end of the Cold War. A government website on the history of neutrality says that the upheaval from the fall of the Berlin Wall and the collapse of the Soviet Union “fundamentally changed Switzerland’s foreign and security policy environment.”

“It is evident that neutrality has never been a rigid institution,” Switzerland said in a white paper in 1993 on neutrality.

The seizure of the Nestle and Auchan units is the largest takeover of foreign corporate assets in Russia since at least 2024. It comes amid deep tensions with Europe, which has been hit with multiple so-called hybrid attacks that have been blamed on Moscow. Among the incidents have been multiple drone attacks, including an attempted one at Leipzig airport in Germany.

Nestle said in a statement Friday that it took note of Putin’s decree and was assessing the situation and its options. “Nestle 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,” it said.

–With assistance from Laura Malsch.

(Updates with comment from academic in 5th paragraph)

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