Nestlé is reportedly considering its options in the wake of a decision by the Russian government to temporarily seize control of its subsidiaries, including confectionery manufacturing in the region, reports Neill Barston.

The Swiss-headquartered business has continued to trade in the country over the past four years in the wake of Russia’s conflict with neighbouring Ukraine, and while some firms such as Lindt and drinks brands such as Pepsi and Coca-Cola have exited Moscow, snacking and chocolate groups ranging from Mondelez and Unilever through to Barry Callebaut of have continued operating there in spite of the geopolitical uncertainties of doing so.

Nestle has reportedly suspended production of its flagship KitKat chocolate series in Russia amid the ongoing hostilities, though it is believed to be continuing manufacturing across all its business portfolio.

However, there remains considerable volatility in the region, as the ongoing war, which began with Russia’s invasion of Ukraine in February 2022, which in recent months appears to have reached renewed tipping points, with reported drone strikes characterising the conflict on both sides.

Despite mediation involving the US and EU nations, there has been no public meeting between the leaders of Russia and Ukraine in the past four years, and there appears little prospect of that changing in the near term.

For its part, Nestlé has two operating units in Russia, Nestlé Russia and Nestlé Kuban, and it has been reported locally that they would now be managed by Russian firm, LEV Management, which is believed to have no public-facing trading history, but is said to be linked to government sources.

There have been further details forthcoming about the reason for the move, or when, if at all, control would be returned to the multi-national business – with similar situations befalling other key companies including Carlsberg drinks company, and the Danone group three years ago.

In its response to what has been termed as a ‘temporary seizure’ of the company’s  Russian assets which emerged last Friday, the multinational firm said: ” Nestlé takes note of Russia’s presidential decree, published yesterday, that places Nestlé Russia under temporary external administration. The company is assessing the situation and its options.

“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,” with the company following up in the past 48 hours to confirm its renewed commitment to operating in the country.