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Kremlin Seizes Nestlé Russia Operations

New York Times Business •
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Nestlé said on Friday that it was assessing its options after the Kremlin announced it would take control of its food business in Russia, the latest example of Russia’s expanding its seizures of Western-owned businesses. A Russian presidential decree, issued Thursday, placed the company’s operations under temporary external administration. Nestlé said it would take “all necessary steps” to protect its rights and ensure the continuity of its business. A company spokesman declined to comment further.

The Kremlin also said that it had put the assets of the French company Auchan under temporary administration. Assets of Nestlé and Auchan were transferred to a company called LEV Management, according to the presidential decree. Auchan declined a request for comment.

Soon after Russia invaded Ukraine in 2022, President Volodymyr Zelensky asked Western companies to pull out of Russia. Companies that announced departures declared more than $100 billion in losses in 2022 and 2023. Some were forced to sell operations at fire-sale prices to buyers approved by the Kremlin. Nestlé scaled back its operations, halting nonessential imports and exports and suspending capital investment. It also suspended a vast majority of its sales, including pet food, coffee and candy sold under the Kit Kat and Nesquik brands.

The Kremlin has bristled at that approach. In 2023, Vladimir V. Putin took over the Russian arm of the Danish brewer Carlsberg and put it under the control of his longtime associate, Taimuraz Bolloev. The same year, Russia also seized Danone and placed it under the control of a nephew of the Chechen leader, Ramzan Kadyrov. It was not immediately clear who owned LEV Management. Russia is moving forward even as President Trump is discussing restarting business deals with Russia. Nestlé reported in 2021 that it had 7,000 employees in Russia and generated sales of 1.7 billion Swiss francs ($2.1 billion), about 2 percent of its sales. Nestlé’s shares were down more than 2 percent on Friday.