Nestlé vows to protect Russian operations despite Putin takeover
Nestlé has vowed to protect its Russian business after Vladimir Putin placed the food giant’s operations in the country under external administration.
The Swiss maker of Nescafé and Purina said on Friday it was assessing its options after a presidential decree handed control of Nestlé Russia and Nestlé Kuban to Russian firm L.E.V. Management.
“Nestlé is 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”, the company said.
The move strips Nestlé of control over its Russian operations, although ownership formally remains with the existing shareholders. The decree transfers management of 100 per cent of both Nestlé Russia and Nestlé Kuban to L.E.V. Management.
Nestlé employs around 7,000 people in Russia and operates six factories producing products including coffee, baby food and pet food. Its Kuban business includes a major instant coffee factory in Timashevsk, where Nescafé is produced.
The group remained in Russia following the invasion of Ukraine in 2022 but scaled back its operations, halting new investment and stopping sales of brands including KitKat and Nesquik.
Nestlé has previously said it would focus its Russian operations on essential foods and would not seek to make a profit in the country.
Moscow tightens grip on Western firms
Putin has increasingly used temporary administration to take control of foreign-owned businesses since 2023.
The mechanism has previously been applied to the Russian operations of companies including Danish brewer Carlsberg and French food group Danone, which subsequently sold their businesses in the country.
French supermarket group Auchan was also placed under L.E.V. Management by Thursday’s decree, alongside Russian assets linked to FM Logistic and the former Leroy Merlin business.
Russian newspaper Kommersant reported last month that KS Logistika had requested temporary administration over five Nestlé entities, in what its source said could be the first step towards a change in ownership.
The request was linked to Nestlé’s decision not to expand Russian production capacity and to stop exports from its factories in the country, according to the report.
Nestlé said it was now assessing the decree and its options, while seeking to keep its Russian operations running.