Full Breakdown
Kremlin Seizes Nestlé and Auchan Assets in Russia
By Drooid · · How we work
Core Event: Temporary Administration of Western Firms
On September 17, 2026, President Vladimir Putin signed a decree placing the Russian operations of Nestlé SA and Auchan Retail under “temporary external administration.” Control of Nestlé Russia, Nestlé Kuban, Auchan’s Russian subsidiary, the former Leroy Merlin chain (now Lemana Pro), and the Russian units of FM Logistic was transferred to Moscow-based L.E.V. Management. The move follows a 2023 law that allows the state to assume management of assets owned by companies from “unfriendly” countries.
Background & Context
Since the invasion of Ukraine in February 2022, Russia has tightened rules for foreign firms. Companies that left quickly sold assets at steep discounts; those that stayed, like Nestlé, reduced non-essential imports, advertising and capital investment while continuing to produce essential food items. The Kremlin frames the 2023 mechanism as retaliation for Western sanctions.
Timeline
- September 10, 2026 – Major-general Andrei Krayushkin was appointed chief executive of L.E.V. Management.
- September 17, 2026 – Putin’s decree assigned the assets of Nestlé, Auchan, Lemana Pro and FM Logistic to L.E.V. Management.
- September 18, 2026 – Authorities announced the seizure; Nestlé and Auchan issued brief statements and markets reacted.
Data & Statistics
- Nestlé operates six factories in Russia, employing about 7,000 people. In 2021 the market generated roughly CHF 2 billion (?2 % of group sales); analysts now estimate the contribution at just over 1 %.
- Auchan runs ?230 stores (including 62 hypermarkets) and employs ?30,000 staff. In H1 2026 it reported sales of 127 billion roubles (?$1.5 billion).
- The decree affects 16 businesses; combined value estimates range from 600 billion roubles (?$7 billion) to a potential Nestlé write-off of ?CHF 1 billion.
- Share-price reactions varied: Nestlé fell between 1.5 % and 2.6 % on different exchanges.
Official Statements & Responses
- Auchan Retail Russia said it had requested “clarifications” from authorities and would comment further once more information was received.
Criticism & Opposition
Ukrainian President Volodymyr Zelensky has criticized Nestlé for continuing operations in Russia, arguing the presence undermines sanctions pressure.
Conflicting Reports & Gaps
- Share-price impact: reports differ on the exact decline, ranging from 1.5 % to 2.6 %.
- Financial impact: Jefferies estimate a write-off of ?CHF 1 billion, while Vontobel’s Jean-Philippe Bertschy calls the effect “marginal” because Russia now contributes only about 1 % of Nestlé’s sales.
- Future ownership: The decree does not transfer legal title, but past cases (Danone, Carlsberg) suggest a high likelihood of eventual forced sale. No timeline has been provided.
Why It Matters
The decree marks the Kremlin’s largest seizure of Western corporate assets since at least 2024, indicating that the window for foreign firms to retain operational control in Russia is closing. Nestlé and Auchan must protect legal rights, preserve employment for thousands of Russian workers, and manage the financial exposure of assets that may later be sold at steep discounts. The action illustrates how geopolitical tensions are reshaping the investment climate for multinationals in sanctioned economies.