Russia issued a presidential decree Thursday to introduce temporary external administration at certain foreign-owned operations in the country. On Friday, Nestlé - the company behind Nescafé and KitKat - said it took note of the order and is "assessing the situation." The same decree lists French retailer Auchan and Lemana Pro, formerly Leroy Merlin's Russian arm, saying their local assets are to be transferred to a shell entity called L.E.V. Management. When contacted by CNBC on Friday, Auchan did not have a spokesperson available, while Lemana Pro declined to comment.
Nestlé added: "Nestlé is committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees." Shares of the Swiss group traded 2.2% lower on Friday.
The move is widely viewed as a precursor to shifting assets to Kremlin-aligned investors and comes amid renewed pressure on Western companies still operating in Russia during the war in Ukraine. Kremlin spokesperson Dmitry Peskov told RIA Novosti on Friday, "Right now, we're talking specifically about introducing external management; no other decisions have been made yet."
In 2023, President Vladimir Putin approved a decree permitting Moscow to put assets owned by individuals or entities from so‑called "unfriendly" nations under temporary administration. Since then, authorities have seized dozens of companies' Russian subsidiaries, including Carlsberg of Denmark, Danone of France, and Finnish utility Fortum.
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Switzerland is not an EU member, but it has largely adopted the bloc's sanctions on Russia since the full-scale invasion in early 2022. That stance has sparked an initiative pushing for a stricter reading of Switzerland's traditional neutrality, with a national vote expected later this month. Russia says it no longer considers Switzerland neutral and has sharply criticized Bern for providing humanitarian aid to Ukraine.
Policy whiplash can hit companies with Russia exposure fast, and that showed up in Nestlé's 2.2% drop. Keep an eye on how the targeted firms outline legal paths and operational plans, since continuity and employee protections are front and center in their statements.
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