With a decree dated September 17, Russian President Vladimir Putin placed the Russian branches of some large multinationals under controlled administration: Nestlé, Auchan, Bati Logistics, Fm Logistics and Le Monlid Llc. This is not a real confiscation but can precede state expropriation, with the subsequent transfer of assets to individuals or companies linked to the Kremlin.
What the decree provides
The presidential decree signed by Putin effectively transfers the activities of Nestlé, Auchan and other companies to a single Russian company, LEV Management. In practice, the temporary manager exercises the owner’s rights over the transferred shares. The decree does not automatically equate to a definitive transfer of ownership, but it can anticipate this step.
Because multinationals are still in Russia
Many multinationals relocated their operations to Russia following the outbreak of the war against Ukraine. Nestlé and Auchan preferred to modify their activities in the Federation.
According to the Institute of Kiev School of Economics cited by Ukrainian media, Nestlé has suspended several key brands, including KitKat, stopped advertising and blocked capital investments in Russia. France’s Auchan, known for its supermarkets across Europe, placed its Russian subsidiary under local management in 2023, considering it an essential civil service and refusing to leave. Nestlé also justified the continuation of its activities in Russia by arguing that, as a food producer, it supplies essential goods.
Nestlé’s note
Upon hearing the news, Nestlé shares suffered a sharp slowdown on the financial markets. The Swiss multinational responded to the Russian president’s maneuver with a note: “Nestlé takes note of the Russian presidential decree, published yesterday, which places Nestlé Russia under temporary extraordinary administration. The company is evaluating the situation and the options available to it. Nestlé undertakes to adopt all necessary measures to protect its rights and guarantee the continuity of company activities in the interests of all interested parties, in particular its employees”