MOSCOW — Russian authorities seized the assets of Nestlé and Auchan on Friday, placing them under temporary control of the domestic firm L.E.V Management through a presidential decree that escalates the Kremlin's nationalization campaign.
Kremlin spokesperson Dmitry Peskov said Auchan and Nestlé are "European companies from unfriendly countries currently actively involved in hostilities against us."
Nestlé, which produces KitKat chocolates and Nescafe coffee, operates six sites in Russia and employs more than 7,000 people. The company said it is assessing its options following the decree. In 2021, Nestlé's Russian sales accounted for 2 percent of its total group sales, or approximately 2 billion Swiss francs (about $2.4 billion). Nestlé's shares fell 2 percent in Zurich after the announcement.
"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," the company said in a statement.
Auchan operates 230 physical stores and an online platform in Russia, employing 30,000 people in the country. The company did not respond to requests for comment.
Russia has steadily increased control over foreign-owned companies since the full-scale invasion of Ukraine in 2022. President Vladimir Putin signed a decree in 2023 granting the government power to place assets from "unfriendly" countries under temporary state control. The framework has been used to seize Russian subsidiaries of French yogurt maker Danone and Danish brewer Carlsberg. More than 1,000 companies voluntarily exited Russia following the invasion.
Nestlé had already reduced its product range in Russia after the war began, facing criticism from Ukrainian President Volodymyr Zelensky for continuing operations there. Nestlé said it supplies "important food" to the population and does not profit from its "significantly scaled back" Russian business.
The nationalization campaign extends beyond foreign entities. The Kremlin is increasingly targeting domestic companies, redistributing assets on a scale unseen since the Soviet collapse.
Alexandra Prokopenko, a senior fellow at the Carnegie Russia Eurasia Center, said Russia's Prosecutor General's Office "has been aggressively pursuing a suite of nationalizations, reopening privatization deals from the 1990s on the grounds that they violated the country's economic sovereignty." The move signals a broader shift in Russian economic policy.
