Nestlé and Auchan end under temporary administration in Russia. With a decree signed on September 17, Vladimir Putin It has transferred the rights to the stakes of several Western multinationals operating in the country to LEV Management, a Russian company designated as interim manager. The measure affects Nestlé Russia and Nestlé Kuban, the Swiss food group, and the Russian subsidiary of Auchan, as well as other companies.
Formally, this is not a confiscation: ownership of the assets remains with foreign groups, while the temporary manager exercises the owner's rightsHowever, the measure involves the transfer of operational control and may pave the way, in the long run, to a sale or definitive transfer of the activities.
Nestlé and Auchan, two still strong presences in Russia
The measure concerns two groups which, despite having reduced or reorganised their activities after the invasion of Ukraine, they did not completely leave the Russian market. Nestlé had gradually reduced its presence, suspending some brands, including KitKat, advertising and investments, but continuing to produce and distribute some foods considered essential.
The group still has six factories and approximately 7.000 employees in the country and, in 2021, achieved sales of approximately 2 billion Swiss francs, equal to 2% of global turnover. Furthermore, in August, Ks Logistika had requested that five Russian Nestlé companies be placed under temporary administration, citing failure to expand production capacity and a lack of exports as reasons: only two, Nestlé Russia and Nestlé Kuban, were included in the September decree.
Auchan has instead maintained a broader commercial presence, with approximately 230 stores, online operations, and 30.000 employees. In 2023, the branch was handed over to local management, partly because the sales network guaranteed essential civil services and the availability of basic necessities.
Nestlé's response and the stock market's reaction
Nestlé reacted cautiously to Moscow's decision. The group announced that it had taken note of the decree and was working to evaluate the situation and options available, ensuring that will take the necessary measures to protect their rights and ensure business continuity, with particular attention to employees.
The news had an immediate effect on the title: ZurichNestlé shares are down about 1,8%. The issue is not only the loss of operational control of Russian assets, but also the uncertainty about their value and the cost of a possible definitive exit from the country. This is a possibility that JP Morgan had already quantified in August: according to analysts, a sale of the Russian operations at a price close to zero could reduce Nestlé's earnings per share by 3-4%.
Auchan, however, did not comment on the measure.
The precedent of Carlsberg, Heineken and Danone
Temporary administration of foreign assets is nothing new in Russia. Moscow has already used this tool against several Western multinationals, with varying results.
In 2023, for example, Russian assets of Carlsberg had been placed under state administration. The Danish group had already announced its intention to sell its Russian business, but the transition to state control complicated the process. The exit was completed at the end of 2024 with the sale to a local group for approximately $320 million, a value far lower than that previously attributed by Carlsberg to its Russian assets.
The Heineken left Russia in 2023, selling its assets to the Russian group Arnest for one euro and recording an overall loss of around 300 million euros.
In the same year she had been involved DanoneThe group's Russian operations had been placed under temporary control and subsequently sold to a local buyer.
