Kremlin seizes Nestlé’s Russian assets in new crackdown

Nestlé is evaluating its options following an order from President Vladimir Putin to seize its Russian operations. The KitKat producer announced it would take measures to safeguard its rights and maintain business continuity for all stakeholders, especially employees. Russia has been tightening control over foreign-owned assets since the beginning of the Ukraine war in 2022.

A 2023 decree by Putin permits the temporary administration of assets from unfriendly nations. The Kremlin's decree transferred control of Nestlé's Russian factories, which produce coffee, pet care, and infant formula, to a company called LEV Management. The Swiss confectionery giant has six factories in Russia, generating about 2bn Swiss francs (£1.8bn) in sales in 2021 and employing around 7,000 people.

Analysts expect the financial impact on Nestlé to be minimal due to Russia's minimal contribution to the company's overall sales, which now account for just over 1pc of its sales. However, some experts predict the company may lose these assets permanently, potentially costing it around 2pc of its sales and tied-up cash in Russia.