Nestle Weighs Options After Russia Takes Control of Its Russian Business

Nestle said on Friday it was considering all available options to protect its rights after the Kremlin placed the Swiss food giant’s Russian business under temporary administration. The move, announced through a presidential decree on Thursday, marks the latest action against a Western company operating in Russia since the war in Ukraine began. Nestle said it was assessing the situation and would take necessary steps to protect its rights and ensure business continuity, particularly for its employees.

Russia has tightened control over foreign-owned assets since 2022, using a mechanism introduced by a 2023 presidential decree to place assets from countries it considers “unfriendly” under temporary administration. Nestle operates six factories in Russia and employed around 7,000 people there. The company generated about 2 billion Swiss francs in Russian sales in 2021, equivalent to roughly 2% of its total revenue at the time, although analysts estimate the contribution has since fallen after Nestle reduced its activities in the country. Shares in Nestle were down 2.4% at 1005 GMT on Friday.

The decree also targeted French supermarket group Auchan, whose Russian assets were transferred to temporary management. Analysts said Nestle could face the possibility of an eventual asset impairment or an unfavourable disposal, although the financial impact on the wider group may remain limited given Russia’s smaller contribution to sales. Previous cases involving companies such as Danone and Carlsberg have seen Russian assets transferred or sold under pressure. Nestle said it had maintained limited operations in Russia because it supplies essential food products.

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