President Vladimir Putin has placed major Russian subsidiaries of Nestlé and Auchan under temporary external administration, escalating Moscow’s campaign against European companies while stopping short of formally transferring ownership.
MOSCOW | Published at 1:46 p.m. EDT
Russia has taken operational control of the local businesses belonging to food giant Nestlé and French retailer Auchan, raising the prospect that two of the largest remaining Western commercial operations in the country could eventually be sold to Russian owners.
President Vladimir Putin signed Decree No. 661 on September 17, adding 16 Russian legal entities connected to foreign companies to a government program for temporary external administration.
The affected entities include Nestlé Russia LLC, Nestlé Kuban LLC and Auchan LLC, along with subsidiaries connected to French logistics company FM Logistic, the Batilogistic group and Le Monlid, which operates the home-improvement retailer formerly known as Leroy Merlin under the Lemana Pro name.
All of the listed entities have been placed under the management of a little-known Moscow company called L.E.V. Management.
The order does not formally nationalize Nestlé or Auchan’s Russian subsidiaries. The foreign parent companies technically retain ownership, but they have lost the authority to manage important parts of their businesses.
That distinction is legally significant, but it may offer limited comfort.
Russia has previously used temporary administration against the local operations of French dairy company Danone and Danish brewer Carlsberg. In both cases, the intervention was followed by sales to Russian buyers under conditions the companies did not freely negotiate.
The new order therefore represents more than an administrative reshuffling. It creates a pathway through which valuable factories, stores, distribution networks, brands and employment operations can be separated from their foreign owners without an immediate declaration of nationalization.
What Putin’s decree does
Decree No. 661 expands a legal system established through Putin’s Decree No. 302 of April 25, 2023.
The earlier measure allows the Russian government to place property associated with people or companies from countries designated as “unfriendly” under temporary management. The affected property can include shares in Russian companies, buildings, equipment, contractual rights and other assets.
The Russian Federal Agency for State Property Management can act as administrator, but Putin can appoint a different organization.
In the Nestlé and Auchan cases, that organization is L.E.V. Management. The company now possesses broad authority over the affected subsidiaries, including the ability to make operational and corporate decisions that would ordinarily belong to their Western owners.
According to an analysis by international law firm Noerr, temporary administrators can exercise extensive control over businesses placed under the regime. Previous cases show that the arrangement can become a form of de facto expropriation even when the foreign company’s ownership remains unchanged on paper. noerr.com
Kremlin spokesperson Dmitry Peskov emphasized that Russia had introduced external management rather than made a final decision about ownership.
“At the moment, we’re talking about the introduction of external management,” Peskov told reporters following the announcement. He said no additional decisions had yet been taken. apnews.com
The word “temporary” suggests that the companies could eventually recover control. Russia’s recent history shows that such an outcome cannot be assumed.
Nestlé’s six factories and thousands of workers
Nestlé has operated in Russia since the 1990s and has built a substantial manufacturing presence in the country.
The company reportedly has six Russian production facilities that make products including coffee, infant formula, cereal, pet food and nutritional goods. Approximately 7,000 people work for the company in Russia.
Russia now accounts for an estimated 1 percent of Nestlé’s worldwide sales, according to Reuters. That makes the business a relatively small part of the Swiss group’s global revenue, but it remains a large local manufacturing operation with valuable physical assets and distribution relationships. reuters.com
Following Russia’s full-scale invasion of Ukraine in February 2022, Nestlé reduced its business in the country. It suspended advertising, stopped nonessential imports and exports, halted capital investment and discontinued the sale of several products.
The company continued producing what it described as essential foods, including infant nutrition and specialized pet food. Nestlé argued that maintaining those operations served humanitarian and consumer needs rather than expanding its commercial position in Russia.
The strategy allowed Nestlé to preserve factories and employment while reducing its exposure to criticism from governments, investors and consumers demanding that Western companies leave Russia.
It also left the company vulnerable to a Russian state intervention.
The Kommersant newspaper reported that Nestlé may have attracted government scrutiny because it refused to increase Russian production capacity and did not resume exports of products manufactured at its Russian plants. Reuters noted that a company called KS Logistika had reportedly requested that the Kremlin place Nestlé’s businesses under temporary administration.
KS Logistika reported revenue of only 1.6 million rubles in 2025 and was believed to represent undisclosed third-party interests. Reuters could not independently verify those reported connections. MarketScreener
Nestlé said it had taken note of the decree and was evaluating the situation and its available options.
“The company is assessing the situation and its options,” Nestlé said in its official September 18 statement. It pledged to protect its rights and preserve operating continuity, particularly for employees. Nestlé Global
Auchan remained when many competitors left
Auchan entered Russia in 2002 and became one of the country’s largest foreign-owned retailers.
At the end of 2025, the company employed 24,236 people and operated 229 stores, according to figures cited by Reuters. Its Russian operation generated approximately 127 billion rubles, or $1.5 billion, in sales during the first half of 2026. reuters.com
Other published counts place the retailer’s network at between 230 and 241 locations, reflecting different reporting dates and the inclusion of multiple store formats.
Unlike many Western corporations, Auchan did not withdraw from Russia following the invasion of Ukraine. Its Russian subsidiary operated with a significant degree of autonomy while the French parent company faced criticism for continuing to serve the market.
Media reports in 2024 suggested that Auchan was exploring a sale to a Russian buyer. No completed transaction was announced before the Kremlin imposed external administration.
Following Putin’s decree, Auchan’s Russian subsidiary said its stores continued to operate normally. The company requested clarification concerning the order and said it would offer a more detailed response after receiving additional information. Meduza
Customers may therefore see little immediate change. Stores can remain open, workers can continue reporting for duty and suppliers may continue making deliveries.
The central change is in the corporate chain of command. The French owner no longer has the same ability to direct the Russian business, control its finances or determine whether it should be sold.
Who is L.E.V. Management?
The appointment of L.E.V. Management is one of the least transparent parts of the decree.
The company was registered in Moscow in October 2024 and has little publicly documented operating history. Its shareholders have not been publicly disclosed.
Russian business reporting identified Andrei Krayushkin as its general director. According to RBC, the company reported only one employee and a loss of 15,000 rubles in 2025. Krayushkin reportedly became its director on September 10, only one week before Putin issued the decree. РБК
Its registered activities reportedly include management consulting, securities investments, venture investments and real-estate transactions.
The difference in scale is striking. A lightly staffed management company has been placed in control of businesses that employ tens of thousands of people, operate hundreds of stores and maintain national manufacturing and logistics systems.
Peskov declined to explain the selection process in detail, saying L.E.V. Management best satisfied the necessary requirements.
Until the ownership and beneficiaries behind the administrator are fully disclosed, questions will remain about whether L.E.V. Management is acting solely as a government-appointed caretaker or preparing the businesses for eventual transfer to selected Russian buyers.
Why Moscow targeted European companies
The Kremlin has presented the measure as a response to Western economic and military pressure over the war in Ukraine.
Peskov described Nestlé and Auchan as European companies associated with countries Russia considers unfriendly. He also accused Western governments of participating in military actions against Russia and supporting strikes on Russian economic infrastructure.
Russia has not publicly presented evidence that Nestlé or Auchan directly participated in military operations. The companies appear to have been targeted because of their national affiliations, their continuing commercial value and the broader confrontation between Moscow and European governments.
Switzerland abandoned much of its traditional neutrality in economic matters after the invasion by adopting many European Union sanctions against Russia. France has provided weapons and other assistance to Ukraine.
The order also arrived amid growing debate in Europe over the future of roughly 210 billion euros in immobilized Russian sovereign assets.
European governments have used profits generated by frozen Russian assets to support Ukraine. Some officials have advocated using the assets themselves, although legal and financial concerns have delayed broader confiscation.
A senior Russian government source told Reuters that it was time for “asymmetric measures” and suggested other European businesses should fear becoming targets. reuters.com
That language makes the Nestlé and Auchan action look less like a routine corporate dispute and more like a geopolitical warning.
Putin says the businesses could be returned
Putin addressed the corporate seizures at the Valdai Forum on October 1.
He insisted that Russia had not nationalized the foreign businesses and characterized external administration as a reciprocal response to Russian assets seized or restricted in Europe.
Asked whether Western companies could recover their assets if political conditions improved, Putin said they could be returned under a “favourable scenario.” reuters.com
That promise leaves several questions unanswered.
The Kremlin has not defined the political or economic conditions that would constitute a favorable scenario. It has not guaranteed that the businesses will remain intact, retain their current assets or avoid being sold before relations improve.
A company returned years later after losing employees, suppliers, intellectual property protections or market share would not necessarily receive the same business it once controlled.
The reassurance is therefore politically useful but commercially uncertain.
Temporary control can become permanent loss
Russia’s treatment of Danone and Carlsberg illustrates the danger.
The Kremlin placed their Russian businesses under temporary administration in 2023. The companies later lost their operations through sales to Russian buyers under heavily constrained conditions.
Western companies attempting to leave Russia must generally navigate government approvals, mandatory price reductions and an exit contribution to the Russian state. Moscow has repeatedly increased the financial cost of departure.
Those rules create a difficult choice.
A company that remains in Russia risks sanctions, reputational damage and government takeover. A company that leaves may have to accept a deeply discounted sale and pay a large fee. A company that reduces operations without withdrawing may be accused of deliberately weakening its Russian subsidiary.
According to a 2025 estimate from Moscow law firm NSP, the Russian state had seized more than $50 billion in private property, including foreign-owned assets, since the war began. reuters.com
The addition of Nestlé, Auchan and Metro AG suggests that the process is expanding rather than winding down.
The implications extend beyond two companies
Approximately 330 European companies continued operating in Russia as of the latest Reuters reporting, down from about 400 a year earlier. The latest interventions tell those companies that compliance with Russian law and continued local employment may not protect them from state control. reuters.com
The risk is especially high for companies with factories, retail networks or other assets that cannot easily be removed from the country.
A technology company may shut down software access or relocate personnel. A food manufacturer cannot move an entire factory across a border. A supermarket chain cannot extract hundreds of buildings, warehouses and supplier contracts.
That gives Russia significant leverage.
The government can preserve local jobs and production while depriving the foreign owner of control. It can also transfer the business to a domestic buyer at a reduced price, creating a new commercial beneficiary without shutting the operation.
For European governments, the cases will add urgency to discussions about investment protection, sanctions enforcement and the treatment of Russian assets held abroad.
For corporations, they demonstrate that geopolitical risk can override conventional property rights with little warning.
Seized, but not yet nationalized
Describing the Nestlé and Auchan businesses as “seized” is understandable because the companies have lost managerial control over their Russian operations.
Legally, however, Russia has imposed temporary external administration. Ownership has not yet been formally transferred.
That distinction should remain clear in news coverage because the next stage has not been announced. The Kremlin could restore control, maintain the arrangement indefinitely or approve sales to Russian owners.
The historical pattern makes a permanent loss plausible, but it is not yet a completed fact.
For now, the factories continue producing, Auchan’s stores remain open and thousands of employees remain at work. Behind that outward continuity, the balance of power has changed decisively.
Nestlé and Auchan still hold their Russian businesses on paper. The Kremlin now controls what happens inside them.
Reporting and sourcing disclosure
This report is based on Russian Presidential Decree No. 661 of September 17, 2026, which amended Decree No. 302 of April 25, 2023. It also draws on Nestlé’s official corporate statement, reporting from Reuters and The Associated Press, Russian business reporting from RBC and Interfax, and legal analysis published by Noerr.