Russia Places Nestlé, Auchan Under Temporary Administration

Russia has placed the Russian operations of Swiss food giant Nestlé and French retailer Auchan under temporary administration, expanding Moscow’s intervention in Western-owned businesses that have continued operating in the country since the full-scale invasion of Ukraine.

The move followed a decree signed by Russian President Vladimir Putin on September 17. The affected businesses have been transferred to the temporary management of a little-known Russian company, L.E.V. Management.

The decree also covers other Western-linked businesses, including the Russian operations of French logistics company FM Logistic and a stake connected to the former Leroy Merlin home-improvement business, now operating under the Lemana Pro name.

What Russia has done

The decree puts the management of stakes and shares in the affected Russian companies under L.E.V. Management.

That does not formally mean that the Russian state has permanently confiscated or legally transferred ownership of the businesses. Russian lawyers cited by Euronews said the measure is formally a temporary management arrangement. However, previous cases show that temporary administration can precede the sale or transfer of Western-owned assets to Russian buyers.

The distinction is important for companies such as Nestlé because their legal ownership and the practical control of their Russian businesses are now separate issues.

Reuters reported that Russia had already taken control of more than $50 billion in foreign assets by 2025 as part of a wider campaign involving Western businesses.

Kremlin cites Western countries’ actions

Kremlin spokesman Dmitry Peskov said Friday that the companies’ links to countries Russia considers “unfriendly” were among the factors considered in the decision.

Peskov also referred to what Moscow describes as hostile actions by European countries against Russia.

The Kremlin’s position comes against the background of sanctions imposed on Russia after its invasion of Ukraine and continuing Western support for Kyiv.

Russia has increasingly used restrictions on foreign companies as part of its response to Western sanctions.

The system has included requirements for presidential approval of certain exits, discounts on some sales and other conditions that have made it difficult for Western businesses to leave the Russian market on their preferred terms.

Nestlé says it is assessing its options

Nestlé confirmed that its Russian business had been placed under temporary external administration.

In a statement issued September 18, the Swiss company said it was assessing the situation and its available options.

Nestlé also said it would take the necessary steps to protect its rights and ensure continuity of operations for its stakeholders, particularly its employees.

Nestlé has operated in Russia since the 1990s.

Reuters reported that the company has around 7,000 employees and six factories in the country.

Following the invasion of Ukraine, Nestlé reduced its Russian operations. It stopped advertising and capital investment and suspended many non-essential sales, imports and exports, while continuing to produce products it considers essential.

The company has therefore remained in Russia while significantly reducing the scope of its business.

Auchan stores continue operating

Auchan has also remained active in Russia since the invasion.

The French retailer entered the Russian market in 2002 and has maintained a much larger retail presence than many Western companies that exited after 2022.

Reuters reported that Auchan has roughly 230 stores and more than 24,000 employees in Russia. Other recent reporting has put the number of employees closer to 30,000, reflecting differences in reporting periods and definitions.

Auchan’s Russian subsidiary said it had asked Russian authorities for clarification about the decree.

The company said its stores and other facilities were continuing to operate normally while it sought more information about the implications of the measure.

That means consumers have not immediately seen a shutdown of Auchan’s Russian retail network.

The role of L.E.V. Management

L.E.V. Management is a relatively little-known Russian company that was registered in Moscow in 2024.

It has now been placed at the centre of one of the largest recent interventions involving Western corporate assets in Russia.

European reporting said the company had limited publicly visible business activity before receiving responsibility for the affected assets.

The identity and background of people connected with the company have also attracted scrutiny.

Euronews reported that Andrei Krayushkin was appointed its general director shortly before the presidential decree. Independent Russian outlet Novaya Gazeta Europe reported that his name and date of birth match those of a Russian Interior Ministry major general, although that identification has not been independently confirmed.

That claim should therefore be treated as reported information rather than an established fact.

A wider campaign against Western assets

The intervention involving Nestlé and Auchan is not an isolated event.

Russia introduced a temporary-administration mechanism in 2023 after the start of the full-scale war in Ukraine.

The mechanism has previously been used in cases involving Western companies including Danone, Carlsberg and Fortum.

In several cases, foreign-owned businesses were subsequently sold or transferred to Russian interests, sometimes at substantial discounts compared with their pre-war value.

The process has created an increasingly difficult environment for multinational companies seeking to withdraw from Russia.

Some companies have left, while others have transferred control to local management or reduced their activities.

Others, including Nestlé and Auchan, continued operating because of the commercial importance of the Russian market and, in Nestlé’s case, the company’s decision to continue supplying certain essential food products.

Financial impact on Nestlé

The Russian intervention could affect Nestlé’s operations and its ability to control or eventually dispose of its Russian assets.

However, analysts cited by Euronews said the direct effect on Nestlé’s overall global sales is expected to be relatively limited.

Russia currently represents roughly 1% of Nestlé’s group sales, down from around 2% before the war, according to an analyst cited by the publication.

The larger issue may therefore be the value and control of the company’s Russian assets rather than an immediate major impact on global revenue.

The situation also creates uncertainty about whether Nestlé will eventually be able to sell the business, regain control or pursue legal action.

The company has not announced a final course of action.

Why the move matters for Western companies

The latest decree sends another signal to multinational companies that remaining in Russia carries risks beyond ordinary commercial and sanctions-related challenges.

A company may retain formal ownership of a Russian subsidiary while losing practical control over the business.

That creates uncertainty over assets, management decisions, employees, profits and any future exit.

For companies still operating in Russia, the developments involving Nestlé and Auchan may also affect how they assess the risks of remaining in the market.

For Western governments, the issue adds another dimension to the economic confrontation surrounding the Ukraine war.

What happens next?

For Nestlé, the immediate priority is assessing its legal and commercial options.

The company has not announced that it is leaving Russia, selling its operations or accepting a permanent transfer of ownership.

Auchan is similarly continuing to operate its Russian stores while seeking clarification from the authorities.

The key question is whether the temporary administration remains temporary or eventually leads to a permanent transfer, sale or restructuring of the affected businesses.

Russia’s previous use of the mechanism means that possibility cannot be ignored, but it would be premature to treat a permanent seizure as having already occurred.

For now, Moscow has taken practical control of the Russian operations of two major European consumer businesses, while Nestlé and Auchan assess what the decree means for their rights, employees and future in the Russian market.

The move adds another chapter to the increasingly complicated relationship between Western companies and Russia’s economy since the war in Ukraine began.