A box of cereal produced by Nestlé SA sits among other products on a shelf inside the Essen hypermarket operated by ZAO Essen Production AG in Naberezhnye Chelny, Russia, on Saturday, August 27, 2016.
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Swiss food giant nestle Ukraine said on Friday it was weighing its options after the Kremlin said it would place the Russian assets of its businesses under temporary external management as part of renewed pressure on Western companies that continue to operate in the country amid the country’s war.
The maker of Nescafé coffee and KitKat chocolate bars said it had taken note of the Russian presidential decree, published on the country’s official legal portal on Thursday, and was “assessing the situation.”
Russian President Vladimir Putin’s surprising move is widely seen as the first step toward moving assets into the hands of Kremlin-friendly investors.
“Nestlé is committed to taking all necessary steps to protect its rights and ensure the continuity of business operations for the benefit of all stakeholders, especially our employees,” the company said in a statement.
Nestlé shares traded 2.2% lower on Friday morning.
French retailer Ocean and Lemano Pro, the former Russian arm of French DIY retailer Leroy Merlin, are also subject to the decree, with their Russian assets set to be transferred to a shell company called LEV Management.
Spokespeople for Auchan and Lemano Pro did not immediately respond to a request for comment from CNBC on Friday.
“We are currently specifically discussing the introduction of external controls. No other decisions have been taken yet,” Russian government spokesman Dmitry Peskov said on Friday, according to RIA Novosti news agency.
In 2023, President Putin signed a decree giving Moscow the power to temporarily take control of the property of people and entities from so-called “unfriendly” countries.
The country has since taken control of dozens of local companies, including Danish beer company Carlsberg and French food manufacturers. Danone and Finnish power company Fortum.
Switzerland, which is not a member of the European Union, has largely adopted EU sanctions against Russia since Moscow’s full-scale invasion of Ukraine in early 2022. The move prompts efforts for a stricter interpretation of the country’s long-standing approach to neutrality, a proposal that Swiss voters are expected to decide on later this month.
Russia no longer regards Switzerland as a neutral country and harshly criticized Switzerland for providing humanitarian aid to Ukraine.
