Swiss Diplomats Push Back as Moscow Seizes Control of Nestlé's Russian Operations
Published on 09/20/2026 at 07:02 | Editorial boerse-global.de
Nestlé is mounting a two-pronged response after the Kremlin stripped the Swiss food giant of operational control over its Russian subsidiaries, while a separate regulatory challenge unfolded in India the same week. The company's shares closed Friday at EUR 81.03, down 2.2%.
Diplomatic channels opened
Bern has stepped into the fray. The State Secretariat for Economic Affairs (SECO) and the Federal Department of Foreign Affairs are pursuing talks with Russian authorities through diplomatic channels, aiming to reverse the temporary external management imposed on Nestlé's local business.
The trigger was a decree signed Thursday by President Vladimir Putin, transferring full control of "Nestlé Rossija" and "Nestlé Kuban" to L.E.V. Management, a Moscow-based firm headed by Andrei Krayushkin. The move leaves Nestlé without direct authority over six production facilities in the country. Moscow framed the measure as a counter-response to states it deems unfriendly; French retailer Auchan was caught up in the same wave.
While the shares remain formally under Nestlé's ownership, day-to-day management has slipped away from the Vevey-based group. Management under CEO Philipp Navratil and Chairman Pablo Isla said it would exhaust legal avenues to protect its property rights, characterizing the arrangement as temporary and working to keep operations running.
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Expropriation risk looms
The political backdrop in Moscow leaves room for further escalation. Dmitri Medvedev, deputy head of Russia's Security Council, has advocated not merely placing Western businesses under trusteeship but expropriating them outright, without compensation. That prospect puts the risk of a full write-down of Russian assets squarely on investors' radar. Whether Swiss diplomacy can unwind the decree remains uncertain amid sustained tensions, and the remaining regional business looks set to stay out of Nestlé's reach for the foreseeable future.
India adds to the pressure
Nearly simultaneously, Nestlé's Indian arm drew scrutiny from the country's food regulator. Reuters reported that the FSSAI launched three adjudicative proceedings against Nestlé India on Friday, alleging violations in the infant nutrition segment. According to the authority, a test sample of follow-up formula showed deficiencies in biotin content.
Nestlé India rejected the claims, insisting products such as NAN EXCELLA PRO and LACTOGEN PRO comply fully with regulations and that their recipes and labeling had been approved by an FSSAI expert panel. Shares of Nestlé India came under pressure on local exchanges, at one point falling roughly 3%.
Overhaul underway
The regulatory setbacks land during a period of operational restructuring. On September 10, Navratil announced price increases, recipe adjustments and the discontinuation of less profitable products, citing higher freight, energy and raw material costs linked to the Middle East conflict. Management is also reworking procurement, including expanded cocoa sourcing in Brazil with reduced fertilizer use.
Analysts weighed in quickly. JPMorgan responded directly to the Russian decree on Friday, keeping its rating at "Neutral" with a price target of CHF 90. Bernstein Research had already maintained its "Market-Perform" rating on Wednesday with a CHF 74 target, pointing to market share losses in Chinese online retail during August.
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