Nestlé Weighing All Options After Kremlin Takes Control of Its Russian Business
President Vladimir Putin signed a decree Thursday placing the company’s Russian assets under temporary administration.
The Kremlin has taken control of the Russian assets of Swiss food giant Nestlé and French retailer Auchan, marking one of the most significant actions against Western firms since the seizure of Russian assets from Danone and Carlsberg in 2023. Kremlin spokesman Dmitry Peskov stated that hostile actions by unfriendly countries, particularly those involved in military actions against Russia, played a role in the decision.
Nestlé, known for its Nescafé coffee and KitKat chocolate bars, is assessing the situation while committing to protecting its rights and ensuring business continuity. The company has suspended most sales, non-essential imports and exports, advertising, and capital investment in Russia. Nestlé generates about 2% of its group sales from Russia, though this contribution may have declined since the company scaled back operations there.
Analysts expect a marginal financial impact due to the limited contribution of Russia to Nestlé's overall sales. The move by the Kremlin follows similar actions taken against foreign-owned assets since the 2022 invasion of Ukraine, with assets seized through temporary administration, forced sales, exit taxes, and discounts.
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