Nestlé Business Hit by Storm as Assets Are Seized
The Russian government is taking over the assets of Western companies still operating within its borders. This time, the Swiss food giant Nestlé and three French business groups have become targets.
According to AFP, the decision was formalised in a decree signed by Russian President Vladimir Putin. The regulation was issued on Thursday night.
More specifically, the decree transfers Nestlé’s operations in Russia, the French retail chain Auchan, and the former home improvement chain Leroy Merlin (now known as Lemana Pro) to a company named LEV Management. The takeover also includes the Russian operations of the French logistics group FM Logistic.
According to reports from the investigative media outlet Novaya Gazeta Europe, LEV Management was only established in late 2025 and is led by a general from the Russian Ministry of Internal Affairs. The company previously had no known business activities.
This move is the latest policy from Moscow towards Western companies in response to sanctions imposed by Western nations on Russia due to the war in Ukraine. Following the Russian invasion of Ukraine, most Western companies chose to sell their businesses and assets in Russia or at least isolate their operations, as sanctions made trading with Russia increasingly difficult.
However, Russia has since tightened the process for foreign companies exiting the country. The government now requires presidential approval for certain transactions and, in some instances, has directly seized company assets.
In response, Nestlé stated that it is currently evaluating the situation. “The company is committed to taking all necessary steps to protect its rights and ensure the continuity of business operations for the benefit of all stakeholders, especially its employees,” Nestable said. “The company is assessing the situation and its options,” it continued, without providing specific details regarding Nestlé’s remaining business in Russia.
On the other hand, Jean-Philippe Bertschy, an analyst at the Swiss investment bank Vontobel, believes the financial impact on Nestlé is likely to be limited because Russia’s contribution to the group’s total sales is relatively small. According to him, Russia currently accounts for just over 1% of Nestlé’s total sales, a decrease from approximately 2% before the war in Ukraine.
Nestlé has already halted most sales, non-essential imports, advertising activities, and capital investments in Russia. However, the company continues to supply a number of food products deemed essential.