Russian authorities have taken control of the local operations of Swiss food company Nestlé and French retailer Auchan, marking a new phase in the Kremlin's efforts to tighten its grip on Western businesses still active in Russia. On Thursday, President Vladimir Putin signed a decree placing the subsidiaries under temporary administration and transferring their management to a shell company named L.E.V. Management. This move follows earlier seizures in 2023 involving the Russian subsidiaries of French food group Danone and Danish brewer Carlsberg’s Baltika Breweries.

While the introduction of external management does not legally equate to a change in ownership, past cases suggest that such measures often precede the transfer of assets to Kremlin-linked Russian investors. Kremlin spokesman Dmitry Peskov linked the decision to what he described as “unfriendly” actions from countries like France, particularly their involvement in military operations against Russia. He emphasized that, for now, the decree only enforces temporary management, without ruling out a possible future change in ownership.

Nestlé, which operates six factories in Russia and employs about 7,000 people, confirmed it is reviewing its options to protect its interests and ensure ongoing business continuity, especially for its employees. The company has scaled down its Russian operations since the country’s full-scale invasion of Ukraine in 2022, focusing on essential food products. Although Nestlé’s Russian business accounts for approximately 2 percent of the group’s total sales, equating to roughly 1.7 billion Swiss francs ($2 billion) annually, analysts have noted the potential for a significant earnings impact.

Auchan, owned by France’s Mulliez family, is one of the largest Western retailers still operating in Russia, with roughly 230 stores and 30,000 employees. The company’s Russian and Ukrainian operations represented just under 10 percent of its total group turnover in the first half of 2025. Auchan has yet to comment on the decree.

Other French companies were also affected by Putin’s decree, including the Russian subsidiaries of home goods retailer Leroy Merlin and logistics firm FM Logistic. Leroy Merlin declined to comment, while FM Logistic said it is assessing the legal and operational implications of the decision.

Since the 2022 invasion, many Western companies exited the Russian market, but some, including Nestlé, PepsiCo, and Mondelez, chose to maintain a presence. In contrast, British-Dutch firm Unilever and Dutch brewer Heineken sold their Russian businesses, which were acquired by Russian industrialist Alexei Sagal, known for his Kremlin connections. Companies like Danone and Carlsberg previously experienced similar asset seizures, with their Russian operations eventually sold at discounted prices to Russian entities linked to the Kremlin, including figures close to Chechen leader Ramzan Kadyrov.

This latest wave of asset seizures underscores the ongoing challenges and uncertainties faced by Western companies operating in Russia amid the geopolitical tensions and sanctions landscape reshaping business environments in the country.