Swiss food giant Nestle SA has escalated its response to Russia's asset seizure, with the company now considering all available legal and operational options to safeguard its rights following President Vladimir Putin's decision to place local assets under temporary external management. According to Reuters, Nestle stated it was taking note of the decision announced in a presidential decree on Thursday and was evaluating the situation. The company, which produces Nescafé coffee and KitKat chocolates, has moved beyond initial assessments to actively exploring legal avenues to protect its business interests in Russia. This represents the most recent action targeting a Western firm since the war in Ukraine began in 2022.
The seizure affects Nestle's significant Russian operations, with the company generating ₹17,000 crore ($2 billion) in sales in Russia in 2021, representing about 2% of Nestle's total sales. However, analysts estimate Russia now contributes around 1% of group sales after the company scaled back activities, with Nestle having six factories producing coffee, petcare and infant formula products. According to Bank Vontobel analyst Jean-Philippe Bertschy, the company has suspended the vast majority of sales, non-essential imports and exports, advertising and capital investment. Nestle employs about 7,000 people in Russia and has maintained operational continuity despite the asset seizure, justifying continued operations by arguing it supplies essential goods as a food producer.
Despite the asset seizure, Nestle has maintained operational continuity in Russia, where it has been present since the 1990s. As reported by Business Standard, the company declined to comment further on specific actions it was considering but stated it was "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." Nestle shares were down 1.5% in early trading in Zurich following the announcement. Auchan, which operates 230 stores and an online business in Russia where it employs about 30,000 people, has continued its retail operations while declining to comment on the situation.
The seizure reflects Russia's ongoing efforts to control foreign assets amid international pressure. According to reports from Bloomberg, more than 1,000 companies have left Russia or scaled back their operations since the Kremlin's war on Ukraine began in 2022. Despite this exodus, many multinational companies including PepsiCo Inc. and Mondelez International Inc. continue to operate in the country. The Russian authorities have previously imposed temporary administration on assets belonging to foreign companies including Danone SA and Carlsberg A/S, with Danone being removed from the list of assets under temporary Russian state management in March 2024 amid reports of a Russian businessman planning to buy the business at a steep discount. In December 2024, Carlsberg sold its shares in Baltika Breweries in a management buyout.
