Full Breakdown
Russia Places Nestlé and Auchan Under Temporary Administration
By Drooid · · How we work
Core Event
On September 18, President Vladimir Putin issued a decree that transferred the Russian operations of Swiss food company Nestlé SA and French retailer Auchan Retail Russia to the external-management firm AO L.E.V. Management. The decree placed 100 percent of Nestlé Russia and its Kuban subsidiary under temporary administration, stripping the multinational of operational control while ownership remains with existing shareholders. Auchan’s Russian assets were similarly transferred to L.E.V. Management.
Background & Context
Since the 2022 invasion of Ukraine, Russia has tightened control over foreign-owned assets. A 2023 decree gave the state authority to place holdings of companies from “unfriendly” countries under temporary administration, a mechanism used previously for Finnish utility Fortum, French yogurt maker Danone, Danish brewer Carlsberg and a joint venture between AB InBev and Turkey’s Anadolu Efes. In many cases, temporary administration preceded the eventual transfer of assets to Kremlin-linked buyers.
Key Figures & Groups
- Vladimir Putin — President of Russia, signed the decree
- Dmitry Peskov — Kremlin spokesman, defended the decision
- Andrey Krayushkin — appointed chief executive of L.E.V. Management
- KS Logistika — firm that reportedly requested temporary administration of Nestlé’s entities
- David Hayes — analyst at Jefferies, estimated a potential write-off for Nestlé
- Warren Ackerman — analyst at Barclays, described the decree as a step toward possible ownership change
- Jean-Philippe Bertschy — analyst at Vontobel, projected limited financial impact for Nestlé
- Jon Cox — analyst at Kepler Cheuvreux, warned of likely loss of assets without compensation
Data & Statistics
- Nestlé employs roughly 7 000 people in Russia and operates six factories producing coffee, pet-care and infant-formula products.
- Russian sales accounted for about 2 percent of Nestlé’s global revenue in 2021 (? 2 billion Swiss francs). Current contribution is estimated at just over 1 percent.
- Auchan runs about 230 stores and an online business in Russia, employing approximately 30 000 people.
- Nestlé’s share price fell 2.4 percent in early trading after the decree.
- The temporary-administration law requires sellers from “unfriendly” countries to accept discounts of at least 60 percent and imposes a special exit tax.
Official Statements & Responses
Nestlé declined to provide further detail.
Auchan, speaking to TASS, said it had requested clarification of the decree and would reply once information was received.
Kremlin spokesman Dmitry Peskov said political considerations influenced the decisions, alleging that Switzerland and France were “actively involved in military actions” against Russia.
The Swiss government offered no immediate comment.
Conflicting Reports & Gaps
- Contribution to Group Sales: Vontobel analyst Jean-Philippe Bertschy estimates Russia now accounts for just over 1 percent of Nestlé’s sales, while other sources cite a 2 percent share based on 2021 figures.
- Future Ownership: Analysts Warren Ackerman and Jon Cox suggest the decree may lead to a permanent loss of assets, but the Kremlin says only temporary administration is intended, leaving the ultimate outcome uncertain.
What’s Next
Russian authorities have not announced a timeline for converting the temporary administration into permanent ownership. Nestlé and Auchan are evaluating options, but no concrete plans for divestiture or legal challenge have been disclosed. The decree may prompt further scrutiny of the temporary-administration regime by foreign governments and investors monitoring the risk of asset expropriation in Russia.