Warsaw (AFP) – Russian authorities have seized the businesses and assets of Swiss food giant Nestle and three French groups, a move the Kremlin defended Friday as a justified measure against firms representing “unfriendly countries” that back Ukraine. A decree signed by President Vladimir Putin transferred the Russian operations of Nestle, French retailer Auchan, and the former Leroy Merlin DIY chain, now known as Lemana Pro, to a company called LEV Management. The decree, issued late Thursday, also covers the Russian subsidiaries of French logistics group FM Logistic.
Investigative outlet Novaya Gazeta Europe reported that LEV Management was created only at the end of 2025 and is headed by a Russian interior ministry general. It had no known business activity. It was the latest move by Russia against Western firms in response to a barrage of sanctions over its war against Ukraine, now in its fifth year. Most Western companies quickly sold their Russian operations and holdings after the Ukraine invasion or at least isolated them, as sanctions have made trading in most goods difficult. Others remained, citing concerns for their employees or citizens’ well-being, but often sharply scaled back their operations. Russia has since made it difficult for firms to leave, requiring presidential authorization for deals, or seizing the assets outright.
In a short statement, Nestle said it was “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.” The company is assessing the situation and its options, it added. Nestle has six factories in Russia and employs around 7,000 people, mainly for coffee, pet care, infant nutrition, and confectionery products, a spokesperson said.
Jean-Philippe Bertschy of the Swiss investment bank Vontobel said he expected the financial impact on Nestle to be small “given Russia’s limited contribution to group sales.” He noted that Russia now accounted for just over one percent of the group’s sales, down from around two percent before the Ukraine war. Nestle has suspended “the vast majority of sales, non-essential imports, advertising, and capital investment,” he said, while continuing to supply essential food items.
“This practice has historically often been a precursor to a forced sale or effective expropriation of operations in the market,” said analysts at the brokerage Jeffries. “This was the case already for Danone and Carlsberg, for example, in 2023,” they wrote, estimating that a write-off of Nestle’s Russia business, including money it had not been able to repatriate, could cost the Swiss firm around one billion francs ($1.2 billion). Nestle shares were down around 2.3 percent on the Zurich stock exchange.
Auchan and Leroy Merlin are both controlled by France’s Mulliez family, which also owns the Decathlon sports retailer. Auchan’s Russian subsidiary said Friday that it had requested “clarifications” from the authorities over Putin’s decree. The food and consumer goods group is one of Russia’s main retailers, with 241 stores in the country, including 62 hypermarkets, and over 33,000 employees according to its website. “Once the corresponding information has been received, we will be able to provide more detailed comments,” Auchan Retail Russia said in a statement to Russian news agencies.
The latest seizure echoes a string of other forced asset transfers, including Moscow’s 2023 takeover of Danone’s Russian business, which was later sold to a nephew of Chechen leader Ramzan Kadyrov.
© 2024 AFP
