Russia imposes temporary control on Nestlé and Auchan amid Kremlin crackdown on foreign firms

Vladimir Putin has ordered the Russian businesses of Nestlé and the French retailer Auchan into temporary administration, in a move that also covers other foreign-linked operations and deepens Moscow’s use of wartime powers against Western companies still active in Russia, according to the Associated Press and the Kremlin decree published this week. The assets are being handed to L.E.V. Management, a Moscow-registered company that has also been assigned local interests linked to FM...

Logistic and Le Monlid, the entity operating the former Leroy Merlin business in Russia under the Lemana Pro name. (apnews.com)

The Kremlin has presented the step as a response to what it sees as hostile conduct by countries backing Ukraine. Dmitry Peskov, the presidential spokesman, said on Friday that the companies came from “unfriendly countries” and argued that some of those states were involved in actions against Russia’s civilian and economic infrastructure. The order follows a legal framework introduced in 2023 that allows the state to place certain foreign-held assets under temporary control, and which Moscow has already used in cases that have at times led to forced sales or transfers to state-linked managers. (apnews.com)

The latest decree also extends a pattern already seen in earlier interventions, where foreign owners lose operational control without automatically losing legal title. AP noted that the same mechanism has previously affected other Western groups operating in Russia since the full-scale invasion of Ukraine in 2022, as companies have faced pressure, sanctions-related complications and high exit costs. In some cases, Moscow has later allowed assets to be sold or returned, but only after a separate political decision. (apnews.com)

Nestlé said it was assessing the situation and would seek to protect its business and staff, while Auchan has not publicly commented in the material reviewed by AP. The scale of the Russian market differs sharply between the two groups: Nestlé’s exposure is comparatively limited, while Auchan has remained a significant retail presence, with hundreds of stores still operating in Russia, according to market reporting cited by Reuters and other outlets. (apnews.com)

Source: Noah Wire Services