Kremlin decides to take control of Nestle's business in Russia — Cyprus Mail
Russia — an aggressor state — has decided to take control of the Russian business of Swiss food producer Nestle. The decision was announced in a decree by the Russian president published on Thursday. The company said it was assessing the situation and considering all options to protect its rights, Cyprus Mail reports.
Nestle said it would take all necessary measures to protect its rights and ensure the continuity of operations in the interests of all stakeholders, including employees. The company did not disclose details of possible further steps. As of 10:05 GMT, Nestle shares were down 2.4%.
Nestle's operations in Russia
Nestle has six factories in Russia producing coffee, pet food and baby food, as well as about 7,000 employees. In 2021, the last year for which the company disclosed such data, its sales in Russia amounted to approximately 2 billion Swiss francs, or $2.4 billion.
More current news is available on the UA.News Telegram channel Telegram.
At that time, the Russian market accounted for about 2% of the group's total sales. Bank Vontobel analyst Jean-Philippe Bertschy estimates that after reducing its operations in the country, Russia accounts for approximately 1% of Nestle's sales. According to him, the company suspended most sales, non-essential imports and exports, advertising and capital investments. Nestle explained its continued operations by saying that it supplies essential goods.
Temporary management of assets
In 2023, a decree by the Russian president gave Moscow the possibility of placing under temporary management the assets of companies from states that the Russian authorities consider “unfriendly.” According to the source, in previous cases, temporary management often preceded the expropriation of assets and their transfer to individuals or companies linked to the Kremlin. Kremlin spokesperson Dmitry Peskov said that for now, this concerns only temporary management.
The same decree also concerned the French supermarket chain Auchan: its Russian assets were transferred to the temporary management of LEV Management. Auchan operates 230 stores and an online business in Russia, employing about 30,000 people, and declined to comment. Peskov said that policy had influenced the decision and accused Switzerland and France of participating in military actions against Russia.
