Nestle weighs options after Russia takes control of its Russian business

Moscow, Russia. Nestle said on Friday it was considering all options to protect its rights after a Kremlin decree placed the Swiss food maker’s Russian business under state control.

The company said it was assessing the decision and was committed to ensuring the continuity of operations, particularly for its employees.

Company response

The maker of Nescafe coffee and KitKat chocolates said it had taken note of the presidential decree announced on Thursday.

“Nestle 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,” the company said in a statement.

Nestle declined to comment further on the measures it was considering. Its shares were down 2.4 per cent at 10.05am GMT.

Foreign assets

Russia has tightened control over foreign-owned assets since the start of the war in Ukraine in 2022.

A 2023 decree signed by President Vladimir Putin allows Moscow to place assets from countries it considers “unfriendly” under temporary administration. Moscow has also used the law to raise funds through forced sales, exit taxes and discounts, while rewarding Kremlin-loyal insiders.

Auchan assets

French supermarket group Auchan was also targeted by Thursday’s decree, with its Russian assets transferred to the temporary management of LEV Management.

Auchan operates 230 stores and an online business in Russia and employs about 30,000 people. The company declined to comment.

Kremlin spokesman Dmitry Peskov told reporters that political considerations were a factor in the decisions. Without naming Switzerland and France, he alleged that they were “actively involved in military actions” against Russia, including “strikes by the Kyiv regime on the objects of our peaceful economic infrastructure.”