Nestle is reviewing its response after the Kremlin moved to place the Swiss company’s Russian business under temporary state administration.
The company said Friday that it was evaluating the situation and considering all available steps to protect its rights. Nestle also said it aimed to preserve business continuity for stakeholders, especially its employees.
The Russian government announced the decision in a presidential decree on Thursday. Since Russia invaded Ukraine in 2022, Moscow has increasingly used temporary administration measures involving assets owned by foreign companies.
Nestle has six factories in Russia that produce coffee, petcare products and infant formula. The company employs about 7,000 people in the country.
In 2021, the last year Nestle publicly reported the figure, the company generated roughly 2 billion Swiss francs, or $2.4 billion, in sales in Russia. That amounted to about 2% of total group sales at the time.
Nestle’s exposure to Russia has decreased since then. The company has suspended most sales, non-essential imports and exports, advertising and capital spending in the country. An analyst at Bank Vontobel estimated that Russia now represents about 1% of Nestle’s group sales.
Nestle shares were down 2.4% at 1005 GMT on Friday.
Russia has used its temporary-administration system to assume control of assets belonging to companies from countries it regards as unfriendly. Such measures can be followed by forced sales or transfers to local management.
French supermarket group Auchan was also included in Thursday’s decree. Its Russian assets were placed under temporary management through L.E.V. Management. Auchan operates 230 stores and an online business in Russia, where it employs about 30,000 people.
Kremlin spokesman Dmitry Peskov said political considerations were part of the decisions. He accused Switzerland and France of participating in military actions against Russia, including what he characterized as attacks on Russian economic infrastructure.
Nestle has previously defended maintaining its Russian operations by saying it continues to provide essential food products.
Other major Western companies have faced comparable pressure. In 2023, Russia took control of the Russian businesses of French dairy company Danone and a Carlsberg stake in a local brewer.
For Nestle, its current financial exposure to Russia is relatively small compared with its worldwide operations. However, what happens to its Russian assets could still have implications for the company’s business and legal position in the country.
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