Russland: Nestlé droht wohl Verlust des Russland-Geschäfts

Nestlé may lose control over its Russian business, according to Russian logistics company KS Logistika. The Russian Economic Newspaper "Kommersant" reported on Monday that President Vladimir Putin has been asked to place five Russian Nestlé companies under temporary management. This move could be a first step towards a later takeover, according to the newspaper.

The Russian government intends to review the request by the end of the year. KS Logistika cites Nestlé's failure to expand production capacities and export goods made in Russia as reasons for the proposal. Reports of potential state management negatively impacted Nestlé's stock price on Monday, with the stock falling 1.6 percent to 79.70 Swiss francs in the morning session.

Nestlé has not yet been contacted by government authorities on this matter, a Nestlé spokesperson told the AWP news agency. Factories and offices continued operations, and the company fulfilled its obligations. A withdrawal from the country is not currently on the table. Nestlé generates about 2 percent of its group revenue in Russia, with six production sites in the country manufacturing items such as coffee, confectionery, baby food, and animal feed.

Analysts believe a loss of the Russian business for Nestlé is possible. Following Russia's invasion of Ukraine in 2022, the company decided not to shut down its operations completely, citing the need to continue providing essential food items to the population in conflict zones. Other Western consumer goods companies, including Barry Callebaut, L'Oréal, and Beiersdorf, remain active in Russia.

JPMorgan analysts now expect a possible loss of the Russian business, which could shave 3 to 4 percent off the earnings per share if Nestlé receives little return on sale. Some companies have already withdrawn, with analysts expecting the development to put more pressure on Nestlé to completely exit Russia. This scenario is not unprecedented: French food company Danone lost control of its Russian business in 2023 after authorities placed it under temporary government management, eventually selling the business for around 180 million euros in 2024 and recording a total loss of 1.2 billion euros.

Similarly, Danish brewing company Carlsberg had its Russian business placed under state management in 2023 and sold its withdrawal with a management buyout of over 320 million dollars by the end of 2024. Heineken abandoned its Russian subsidiary for the symbolic price of one euro and recorded a total loss of 300 million euros. More: How the governor of the Russian central bank's bankruptcy becomes political.