Nestle Considers All Options After Russia Seizes Its Local Business
Nestle is considering all options after Russian President Vladimir Putin signed a decree to seize the food giant's local business, making it the latest Western company targeted by the Kremlin.
Nestle said it is considering all options after the Russian government decided to seize the food giant's local business, according to a Reuters report. Russian President Vladimir Putin signed a decree authorizing the takeover of the company's Russian operations.
Swiss-based Nestle owns brands such as Nescafe and KitKat, and it is the latest target in the Kremlin's moves against Western companies since the war in Ukraine began in February 2022. "Nestle is committed to taking all necessary steps to protect its rights and ensure the continuation of business and interests for all stakeholders, especially its employees," the company said in a statement. Its shares traded down 1.5% in Zurich.
Nestle continued operating in Russia despite international sanctions, arguing that as a food manufacturer it provides essential products. Russia has tightened its control over foreign assets since the war and subsequent sanctions. In 2023, Putin signed a decree granting the government authority to nationalize assets of countries defined as "unfriendly."
Nestle has six factories in Russia producing coffee, pet food, and infant formula. Its sales in the country stood at 2 billion Swiss francs ($2.4 billion) in 2021, the last year for which data is available, and it employs about 7,000 workers. The latest presidential decree also affected French supermarket chain Auchan, whose Russian assets were transferred to temporary management company L.E.V. Management. Other companies whose local businesses Russia has taken over in recent years include Danone and Carlsberg.
