News

Kremlin takes control of Nestlé Russia’s assets

Nestlé is committed to “taking all necessary steps to protect its rights” after Russian authorities have taken temporary control of its operations in the country.

On Thursday (17 September), Russian president Vladimir Putin signed a decree transferring assets of Nestlé Russia and three French businesses, including the supermarket Auchan, to a company called L.E.V. Management, a Moscow-based company registered in 2024.

At a glance:

• Russia has placed Nestlé's assets under external administration in response to Western sanctions over Ukraine.
• The Kremlin is transferring control to a Moscow-based company, potentially leading to asset seizure.
• Nestlé employs around 7,000 people in Russia, mainly for coffee, pet care, infant nutrition, and confectionery.

The move against the European firms comes in response to Western sanctions against Russia over the war in Ukraine.

"Of course, one of the factors taken into account when making this decision was that these are unfriendly countries, which are currently most actively involved in military operations against our country," said Kremlin spokesman Dmitry Peskov at a press conference on Friday (18 September).

A brief statement published on Nestlé’s website said that the company had taken note of Russia’s presidential decree.

“The company is assessing the situation and its options. Nestlé 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 added.

Nestlé employs around 7,000 people in Russia, mainly for coffee, pet care, infant nutrition, and confectionery products.

A spokesperson for the company told Ingredients Network that Nestlé remains the owner of the business. However, in the past, companies placed under temporary external administration have been sold off to Russian buyers.

This was the fate of Danone Russia when, in July 2023, the Rosimushchestvo, Russia’s Federal Agency for State Property Management, placed it under temporary external administration.

In March 2024, the French dairy giant later deconsolidated its Russian business from its accounts after it acknowledged it had “[lost] control of the management”. The total loss to Danone was €1.2 billion.

Exact figures for the potential loss that could be incurred by Nestlé are lacking as it only discloses precise sales figures for its largest markets, and Russia falls outside its top 10 markets. However, the company last communicated sales for Russia in 2021, before the invasion of Ukraine, when it accounted for 2% of group sales.

Since then, it has scaled back operations in the country – it suspended KitKat and Nesquik, among other brands, halted “non-essential” imports and exports into and out of Russia, stopped advertising, and suspended all capital investment – so this figure is likely to be lower today.

Auchan is one of Russia’s largest foreign retailers, employing around 24,000 people and operating 229 stores, according to Global Banking and Finance. In the first half of 2026, it generated 127 billion roubles (€1.32 billion) in sales.

Exiting Russia

Many companies exited Russia following its invasion of Ukraine, while others pared back operations. In recent years, the Russian government has made it difficult for Western companies to exit the country, requiring presidential approval.

According to a 2024 report by investigative outlet Novaya Gazeta Europa, of the 3,708 foreign companies working in Russia before the Ukraine war, 854 left the market or ceased work.

It said that Nestlé was among the 40 companies (others included PepsiCo, Mars, Bacardi, and Campari) that had pledged to sell their Russian businesses, withdraw from the Russian market, and to halt their development plans but maintain some assets in the country, such as factories, retail chains, brands, services, or deliveries.

Writing on LinkedIn, William Courtney, adjunct senior fellow at global policy think tank RAND and former US ambassador to Kazakhstan and Georgia, wrote that the news about Nestlé was “a warning to those […] naive enough to think that business opportunities abound in Russia”.