The move would see the Swiss food manufacturing giant’s Russian operations placed under temporary administration, according to a report by Moscow-based newspaper Kommersant earlier this week.
The request was submitted by an obscure, little-known company operating out of Rudnya, near Smolensk and the Belarusian border, named KS Logistika.
Last year, the company reported revenue of 1.6 million roubles (£13,817) and is said to be representing “third-party interests”, according to Kommersant, one of Russia’s ‘big three’ daily business newspapers.
Citing a source familiar with the matter, the newspaper added that KS Logistika’s request covers five Nestlé-owned entities operating in Russia and could theoretically result in a change of ownership.
Since its invasion of Ukraine in 2022, Russia has tightened its grip on foreign-owned assets, and a decree passed by Putin in 2023 allows the government to place assets from so-called ‘unfriendly’ countries under temporary administration.
The law has previously been used to take control of the Russian-based assets of French dairy firm Danone and Danish brewer Carlsberg.
Like the vast majority of European nations, Switzerland is deemed ‘unfriendly’ by Russia after imposing sanctions following the start of the war in Ukraine.
Nestlé has continued its operations in Russia despite the political fallout from the conflict, arguing it is providing essential goods to the Russian people as a food manufacturer.
In a statement given to Food Manufacture, a Nestlé spokesperson said: “Nestlé has not been contacted by the Russian authorities regarding this matter.
“Nestlé continues to operate its offices and factories in Russia, and we meet regulatory requirements in the country.”
Kommersant’s source said the request was prompted by Nestlé’s decision not to expand its Russian production capacity and to halt exports of products made at its factories in Russia.
Temporary administration would not necessarily equate to asset seizure, consultant Natalia Popravko told the paper, although some foreign businesses have seen their operations confiscated or sold to Russian investors.
According to industry analyst Mikhail Burmistrov, the Swiss firm’s Russian business could be worth between £1.4 billion and £1.54 billion, including around £1 billion in assets and brands, and £390 million in undistributed profits.
Nestlé currently operates six facilities in Russia, in the Kaluga, Vologda, Samara, Vladimir, Perm and Krasnodar oblasts, producing coffee, confectionery, baby food and pet food.
