Russia has taken control of the Russian assets of Swiss food giant Nestle and French retailer Auchan, with the Kremlin saying the move was partly a response to what it described as “hostile actions” by European countries supporting Ukraine.
The seizure, announced in a decree signed by President Vladimir Putin, represents one of Moscow’s most significant interventions against Western-owned businesses since Russia took control of the Russian operations of French dairy company Danone and Danish brewer Carlsberg in 2023.
Kremlin spokesman Dmitry Peskov said the affected companies were from European countries that Russia considers “unfriendly” because of their positions on the war in Ukraine.
“We are talking about European companies from unfriendly countries,” Peskov said, adding that those states were “currently involved in the most active manner in military actions against our country.”
Although Peskov did not specifically name France or Switzerland, France has been a major supplier of military assistance to Ukraine, while Switzerland has imposed sanctions on Russia despite maintaining a policy of military neutrality.
The Swiss government expressed concern over the move and said it was supporting Nestle’s efforts to have the decision reversed.
Nestle, which produces brands including Nescafe and KitKat, said it was assessing the situation and would take measures to protect its interests.
The company said it remained committed to “taking all necessary steps to protect its rights and ensure continuity of business operations,” particularly in the interests of its employees and other stakeholders.
Nestle operates six factories in Russia producing coffee, pet-care products and infant formula. The company recorded about 2 billion Swiss francs, or roughly $2.4 billion, in Russian sales in 2021, the last year it publicly disclosed country-specific figures.
Russia accounted for about two per cent of Nestle’s group sales at the time though analysts estimated that its contribution has since fallen to around one per cent after the company reduced its activities in the country.
French retailer Auchan, which operates about 230 stores and an online business in Russia and employs approximately 30,000 people, also had its Russian assets placed under temporary control. The assets were transferred to L.E.V. Management, a little-known company with little publicly available information about its operations.
Auchan declined to comment on the development.
Moscow tightens grip on foreign assets
The move comes as relations between Russia and European governments remain severely strained over the war in Ukraine.
Since launching its full-scale invasion of Ukraine in 2022, Moscow has progressively tightened restrictions on foreign-owned assets, particularly those belonging to companies from countries it considers “unfriendly.”
A decree signed by Putin in 2023 provides a framework for placing assets owned by companies from such countries under temporary Russian administration.
The mechanism has also been used to facilitate the sale of foreign-owned businesses, with Moscow imposing exit taxes and requiring some assets to be sold at significant discounts.
According to a 2025 estimate by Moscow-based law firm NSP, the Russian state has seized more than $50 billion worth of private property since the beginning of the war, including assets belonging to foreign companies that withdrew from the Russian market.
The latest move has raised concerns that temporary administration could eventually result in permanent state ownership or the transfer of assets to Russian investors with links to the Kremlin.
In previous cases, companies placed under temporary administration have subsequently been transferred to state entities or Kremlin-linked individuals and businesses.
Peskov, however, said only temporary administration was currently under consideration for the Nestle and Auchan assets.
Nestle has previously defended its continued presence in Russia on the grounds that it provides essential food products. Nevertheless, the company has suspended most sales, non-essential imports and exports, advertising and capital investment in the country.
Analysts said the immediate financial impact on Nestle’s global business could be limited because of Russia’s relatively small contribution to group revenue, but warned that the company could ultimately lose control of its Russian assets.
Bank Vontobel analyst Jean-Philippe Bertschy said the development was negative for investor sentiment and raised the possibility of an impairment or an unfavourable disposal though he expected the overall financial impact to remain limited.
Kepler Cheuvreux analyst Jon Cox said Nestle could ultimately lose its Russian assets, which represent roughly two per cent of the company’s sales based on earlier figures, with any compensation unlikely to fully offset the loss.
The development underscores the growing risks for Western companies that have retained assets in Russia despite sanctions, political pressure and Moscow’s increasingly aggressive approach to foreign-owned property.
