In a move that echoes the great reversals of the twentieth century, Russia has placed the operations of Nestlé and Auchan under state control, invoking the language of sovereignty and hostility to justify what amounts to the largest peacetime seizure of private enterprise since the Soviet era. The decree, signed by President Putin and administered through a domestic management entity, affects some 37,000 workers and billions in annual commerce — not as an isolated act, but as part of a widening campaign that now reaches domestic firms and decades-old privatization agreements. What is unfolding
Kremlin seizes Nestlé, Auchan assets in sweeping nationalization drive
Approximately 37,000 employees across both companies face uncertain employment status under state control.
The scale of these nationalizations is unprecedented since the Soviet Union's collapse.
Mark
Why does Russia care about controlling Nestlé and Auchan specifically? These are food and retail companies, not defense contractors.
Mimi
The Kremlin frames it as a sovereignty issue. These are European companies from countries it considers hostile, and by seizing them, the state gains control over supply chains and revenue streams during wartime. It's also about demonstrating power.
Luke
But we should note—the justification about "hostilities" is the Kremlin's language. Nestlé and Auchan aren't militaries. The real driver seems to be that they're foreign-owned and the government wants to consolidate control.
Mark
What happens to the 37,000 employees?
Mimi
That's the immediate human question. They're now working for a state-controlled entity called L.E.V Management. Their wages, benefits, and job security are all in flux. The source doesn't tell us what happens next for them.
Luke
Right—and that's a gap. We know the seizure happened, but we don't have reporting on whether workers have been notified, whether there are layoff plans, or what the state intends to do with these operations long-term.
Mark
Is this just about these two companies, or is something bigger happening?
Mimi
It's much bigger. The Kremlin is reopening privatization deals from the 1990s—essentially unwinding the post-Soviet transition to private enterprise. It's happening to foreign companies and Russian companies alike.
Luke
The source quotes one analyst saying this is unprecedented since the Soviet collapse, which is a strong claim. But we're only seeing one expert's perspective on the scale. That said, the pattern is clear: Danone, Carlsberg, and now these two, all in the last few years.
The Pulse
- Russia has seized the Russian operations of Nestlé and Auchan by presidential decree, transferring control to a state-linked entity and leaving 37,000 employees in legal and economic limbo.
- The Kremlin's justification — that both companies are European firms from 'hostile nations actively participating in hostilities' — signals that remaining in Russia offered no protection from expropriation.
- Nestlé's stock fell 2 percent in Zurich immediately after the announcement, while the company said it was evaluating its options and committed to protecting employee continuity — a careful response with few real levers to pull.
- The seizures follow a 2023 Putin decree enabling takeovers of assets from 'unfriendly' nations, a legal framework already used against Danone and Carlsberg, and now expanding to domestic Russian companies whose 1990s privatization deals are being retroactively challenged.
- With parliamentary elections expected this weekend to deliver a sweeping United Russia majority, the acceleration of nationalizations appears timed to consolidate state power across both the political and economic landscape.
In a move that echoes the great reversals of the twentieth century, Russia has placed the operations of Nestlé and Auchan under state control, invoking the language of sovereignty and hostility to justify what amounts to the largest peacetime seizure of private enterprise since the Soviet era. The decree, signed by President Putin and administered through a domestic management entity, affects some 37,000 workers and billions in annual commerce — not as an isolated act, but as part of a widening campaign that now reaches domestic firms and decades-old privatization agreements. What is unfolding in Russia is less a policy than a philosophy: that the state, in moments of perceived existential pressure, reserves the right to reclaim what markets once distributed.
Russia has moved to seize the Russian operations of Nestlé and Auchan, placing both companies under the temporary control of a domestic entity called L.E.V Management through a presidential decree announced this week. Kremlin spokesperson Dmitry Peskov framed the action as a response to both firms being European companies from nations he described as hostile to Russia and actively engaged in conflict against it.
Nestlé, the world's largest food and beverage company, runs six facilities in Russia and employs more than 7,000 people there, with Russian operations generating roughly $2.4 billion in annual sales before the seizure. The company said it was assessing its options while working to protect employee and stakeholder interests. Its stock fell 2 percent on the Zurich exchange. Auchan, a French retailer with 230 stores and 30,000 Russian employees, did not comment publicly. Together, the two companies account for approximately 37,000 workers whose futures are now uncertain under state administration.
The seizures are part of a pattern established by Putin's 2023 decree granting the government broad authority to take control of assets from companies in countries classified as unfriendly. Danone and Carlsberg have already been subjected to similar measures. Nestlé had previously faced criticism — including from Ukrainian President Zelensky — for remaining in Russia after the 2022 invasion, and had responded by narrowing its product range and operating at no declared profit.
What makes the current moment distinct, according to analysts, is that the nationalization campaign has expanded beyond foreign firms. Russia's Prosecutor General's Office is now pursuing domestic companies as well, revisiting privatization agreements from the 1990s on the grounds that they violated economic sovereignty. Scholars tracking the trend describe the scale as without precedent since the Soviet collapse.
The timing is not incidental. Parliamentary elections expected to deliver a commanding majority to Putin's United Russia Party are scheduled for this weekend — the first nationwide legislative vote since the invasion of Ukraine. The consolidation of economic control appears to be moving in step with the political moment.
Russia has begun seizing the Russian operations of Nestlé and Auchan, two major foreign companies, placing their assets under state control through a presidential decree announced this week. Kremlin spokesperson Dmitry Peskov justified the move by describing both firms as European companies from hostile nations that are actively participating in hostilities against Russia. The seized assets have been transferred to temporary control of a domestic entity called L.E.V Management.
Nestlé, the world's largest food and beverage company, operates six facilities across Russia and employs more than 7,000 people there. Before the seizure, the company's Russian operations generated approximately $2.4 billion in annual sales—about 2 percent of the company's total global revenue, based on figures from 2021, the last year Nestlé publicly reported country-specific numbers. In response to the decree, Nestlé said it was evaluating its options and committed to protecting its rights while ensuring business continuity for employees and other stakeholders. The company's stock price dropped 2 percent on the Zurich exchange following the announcement.
Auchan, a French retailer selling groceries, clothing, household goods, and electronics, operates a larger physical footprint in Russia than Nestlé—230 stores plus an online operation—and employs 30,000 people. The company did not respond to requests for comment about the seizure. Together, the two companies employ approximately 37,000 people whose employment status is now uncertain under state control.
This seizure is part of a much larger pattern. In 2023, President Vladimir Putin signed a decree that gave the Russian government broad authority to take temporary control of assets belonging to companies from countries classified as unfriendly. Since then, the government has seized the Russian subsidiaries of Danone, the French yogurt maker, and Carlsberg, the Danish brewer. More than 1,000 foreign companies voluntarily left Russia in the months following the 2022 invasion of Ukraine, but those that remained have faced increasing pressure.
Nestlé had already drawn international criticism for continuing to operate in Russia after the invasion began. Ukrainian President Volodymyr Zelensky was among those who objected to the company's decision to maintain a presence there. In response, Nestlé significantly reduced the range of products it sells in Russia and has argued that it operates at no profit, framing its continued presence as a way to supply essential food to the Russian population.
What distinguishes the current moment is that the Kremlin's nationalization campaign is no longer limited to foreign-owned enterprises. Russia's Prosecutor General's Office has begun aggressively pursuing the seizure of domestic companies as well, reopening privatization deals from the 1990s and arguing that those transactions violated the country's economic sovereignty. According to Alexandra Prokopenko, a senior fellow at the Carnegie Russia Eurasia Center in Berlin, the scale of these nationalizations—affecting both foreign and domestic firms—is unprecedented since the Soviet Union's collapse.
The timing is significant. Putin's United Russia Party is expected to win an overwhelming majority in parliamentary elections scheduled for this weekend, marking the first nationwide legislative elections since the 2022 invasion. The consolidation of state control over private enterprise appears to be accelerating in parallel with the political calendar.
Notable Quotes
Auchan and Nestlé are European companies from unfriendly countries currently actively involved in hostilities against us— Kremlin spokesperson Dmitry Peskov
Nestlé is committed to taking all necessary steps to protect its rights and ensure continuity of business operations in the interests of all stakeholders, particularly its employees— Nestlé statement
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Politics & Governance