Putin seizes the assets of Nestlé, Auchan and Leroy Merlin in Russia

BarcelonaThe Russian government has ordered the temporary transfer of the management of the assets of the Swiss food group Nestlé, the French supermarket chain Auchan –Alcampo in the Spanish market– and the also French Leroy Merlin, specialized in DIY material, to the company L.E.V. Management. The Russian president, Vladimir Putin, is thus responding to the sanctions of European countries against the Russian regime for the invasion of Ukraine, in particular Switzerland, a traditionally neutral country.

In this way, by presidential order, practically 100% of the assets of these companies' subsidiaries in the country temporarily pass into Russian hands, without a specific period being specified, through a document signed by Vladimir Putin himself. The measure was approved coinciding with the legislative elections in Russia.

Specifically, the Nestlé subsidiaries, Nestlé Kuban and Nestlé Russia, whose shares are divided between the companies Societé des Produits Nestlé and Nestlé Germany, are transferred to the Russian company. For its part, the company Auchan –almost 100% owned by the company Sogepar–, Le Monfild and Batilogistic –both linked to Leroy Merlin– and FM Logistic have also suffered the confiscation of their assets. L.E.V. Management has been designated as the temporary administrator of the European multinationals and, according to the Russian media Novaya Gazeta Europa, it is a firm owned by the general of the Russian Interior Ministry, Andrei Kraiushkin.

Kremlin spokesman, Dmitry Peskov, has justified the measure because they are "European companies from hostile countries" that "are currently involved in a very active way in military actions against the country". In 2023, Moscow had already adopted similar measures against the Danish beer manufacturer Carlsberg and the French food multinational Danone, whose assets in Russia also ended up under the control of companies linked to Putin's political allies.

France is one of the European states leading military, political, and economic support for Ukraine, including sanctions against companies and individuals close to the Kremlin. Switzerland, by contrast, has not provided any kind of weaponry or direct aid to Kyiv, but it has applied various sanctions against high-ranking officials and businessmen of the Putin regime.

Company protests

The multinationals affected by the confiscation have protested against the Kremlin's measure and have demanded explanations from the Russian authorities, although at this moment it is unknown what future implications this transfer, a priori, temporary, will have. "Nestlé takes note of the Russian presidential decree, published yesterday, which places Nestlé Russia under temporary external administration. The company is evaluating the situation and its options. Nestlé is committed to taking all necessary measures to protect its rights and ensure the continuity of its commercial operations for the benefit of all stakeholders, in particular its employees," says a statement issued by Nestlé this Friday.

For its part, Auchan has submitted a request for clarification to the Russian government and will wait to know the details before giving a broader response, as the firm reported to the Russian agency TASS. Similarly, Lehman Pro –the Russian subsidiary of Leroy Merlin– has also requested explanations from the authorities and they state that they do not have much information about the decree, according to the aforementioned agency.