Putin assigns Nestlé, French assets to Russian administrator

Russian President Vladimir Putin has placed Nestlé’s main Russian businesses and assets linked to three French groups under temporary management by L. E. V. Management, widening Moscow’s control over foreign-owned companies still operating in the country.

The presidential decree, signed and published on Thursday, covers Nestlé Russia and Nestlé Kuban, as well as interests connected to retailer Auchan, logistics group FM Logistic and Groupe Adeo, the owner of the former Leroy Merlin business. It took effect on publication. Under the order, L. E. V. Management assumes temporary control of the specified holdings while the foreign owners retain legal ownership.

Nestlé said on Friday that it was assessing the situation and its options after the decree placed Nestlé Russia under temporary external administration. The Vevey-based group said it would take all necessary steps to protect its rights and ensure continuity of operations, particularly for employees.

The decree places 100 per cent of the foreign-held stakes in Nestlé Russia and Nestlé Kuban under the appointed administrator. Nestlé’s Swiss and German entities hold the shares in the two businesses. The Russian operations include production of food and beverages, and Nestlé has continued operating in the country while reducing the scope of its business since Russia’s full-scale invasion of Ukraine in February 2022.

The order also transfers temporary management of Auchan’s Russian subsidiary. Almost all of the retailer’s local company is held by French entity Sogepar, with a small remaining stake held through another entity. Auchan has been among the major Western consumer groups that continued operations in Russia after 2022.

Assets associated with FM Logistic and Bati Logistics are also included. The decree covers Russian companies connected to the French logistics group, which built a substantial warehousing and distribution presence in the country before the war.

A further provision concerns Le Monlid, the Russian legal entity associated with the former Leroy Merlin home-improvement operation, now trading as Lemana Pro. The decree covers the controlling stake held by UAE-registered Scenari Holding and a 0.007 per cent interest held by France’s Groupe Adeo. Leroy Merlin’s former owner had announced plans in 2023 to transfer control of its Russian operations.

L. E. V. Management was registered in Moscow in October 2024. Public corporate records cited in Russia show registered capital of 15,000 roubles and identify Andrei Krayushkin as chief executive from September 10. Information on its ultimate owners is not publicly disclosed.

Russia has increasingly used temporary administration to take control of foreign-owned businesses since 2023. A presidential decree issued that year created a mechanism allowing authorities to place assets belonging to investors from countries designated by Moscow as “unfriendly” under temporary state-appointed management.

That mechanism was previously used against Russian subsidiaries of companies including Danone and Carlsberg. In those cases, control was transferred to Russian administrators before the businesses later changed hands, adding to concerns among foreign groups over their ability to retain control or secure full value for local assets.

Moscow has also tightened exit rules for foreign companies seeking to leave Russia. Companies from jurisdictions classified as unfriendly have faced government approvals, compulsory discounts on asset sales and payments to the federal budget as conditions for divestment.

Nestlé chose not to withdraw fully after the invasion, saying it would focus its Russian business on essential and basic foods. It stopped advertising, suspended capital investment and halted sales of some non-essential brands, while maintaining products including infant food and medical nutrition.

The company operates several production sites in Russia and employs thousands of people. Its exposure to the market has declined as a proportion of global sales, reducing the financial significance of the business to the wider group even as the temporary administration raises legal and operational questions over control of its local entities.

Nestlé’s Russian footprint includes six factories and about 7,000 employees, producing categories such as coffee, confectionery, infant nutrition and pet food. Russia now accounts for roughly 1 per cent of group sales, after the company curtailed its portfolio and investment. The temporary-management order therefore affects a business that remains operational and sizeable locally, though materially smaller within Nestlé’s portfolio than before the war and sanctions reshaped its activities.