Nestlé Russia to continue operations – overview
- Nestlé Russia pledges continued operations despite Kremlin seizure of assets
- Russia transfers Nestlé Russia and Kuban to LEV Management
- Nestlé employs around 7,000 staff across six Russian factories
- The move raises uncertainty over foreign-owned businesses in Russia
- Previous temporary administrations have sometimes preceded asset expropriation
Nestlé Russia has vowed to continue operations despite state intervention.
The announcement comes after the Kremlin seized control of the food and beverage giant’s facilities late Thursday night, with analysts speculating the move could lead to a forced sale.
“The Nestlé Group in Russia is continuing its commercial activities in Russia in full and wishes to state its intention to unconditionally fulfil all obligations to clients, partners, and employees,” state news agency TASS quoted the company’s Russian press service as saying in a statement.
It continued that the transfer of control did not amount to nationalisation or a change of ownership.
The Swiss multinational had previously said it was “assessing the situation and its options” following Moscow’s actions.
Nestlé Russia under state control
The Russian government announced Thursday night (17 September) that it was placing the food and beverage giant under temporary administration.
According to the decree, Nestlé Russia and Nestlé Kuban were to be transferred to the temporary control of LEV Management, a Moscow-based company registered at the end of 2024, with no known business activity.
The world’s biggest CPG has six factories across Russia and employs around 7,000 staff. It generated US$2.4bn (€2.1bn) in sales in 2021 – the last year figures were publicly disclosed.
Following Russia’s invasion of Ukraine, Nestlé suspended non-critical imports and exports, capital investment and advertising activities in the country, while continuing to supply what it described as “essential products”.
It has said it’s “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”.
Russian intervention
Russia has tightened control over foreign-owned assets since its invasion of Ukraine in 2022, with a 2023 decree signed by President Vladimir Putin giving Moscow powers to place assets from countries it deems “unfriendly” under temporary administration.
The mechanism has previously been used against a number of Western companies, including the Russian operations of Danone and Carlsberg – both of which ultimately completed heavily discounted disposals, with Danone reporting a loss of approximately €1.2bn and Carlsberg DKK7bn.
The development marks a significant escalation in Russia’s approach to foreign-owned consumer goods companies and is likely to be closely watched by multinationals with substantial manufacturing operations still in the country.
Nestlé has not yet responded to request for comment on the statement published by TASS.
We’ll continue to report on this developing story and its impact on the wider industry.
