Nestlé vows to protect Russian operations despite Putin takeover

Swiss food giant Nestlé has vowed to safeguard its Russian business operations following President Vladimir Putin's decision to place the company's Russian and Kuban entities under external administration. The Swiss multinational, best known for its Nescafé and Purina brands, stated that it is currently evaluating its options to ensure the continuity of its operations in Russia, with the primary aim of protecting its interests and the welfare of its employees.

The decree, issued on Friday, transferred the management of both Nestlé Russia and Nestlé Kuban to Russian firm L.E.V. Management. Despite the transfer of control, ownership of the operations remains with the existing shareholders. Nestlé, which employs approximately 7,000 people in Russia and operates six factories producing a range of products, including coffee, baby food, and pet food, will now face a challenge in maintaining control over its Russian operations.

The company has been present in Russia since the invasion of Ukraine in 2022, but has scaled back its operations, halting new investments and stopping sales of brands such as KitKat and Nesquik. Nestlé has previously expressed its intention to focus on essential foods in Russia and not to pursue profits in the country.

Russian President Putin has been utilizing temporary administration as a tool to gain control over foreign-owned businesses since 2023. The method has already been employed to take over the Russian operations of Danish brewer Carlsberg, French food group Danone, and French supermarket group Auchan, which were subsequently sold off.

According to Russian newspaper Kommersant, the decree could be the first step towards a change in ownership for Nestlé in Russia. Nestlé has stated that it is currently assessing the decree and exploring its available options while striving to keep its Russian operations running.