Russia increases state control over foreign assets amid economic strain

The Russian government is intensifying its takeover of assets belonging to European companies that remained in the country following the invasion of Ukraine. In recent weeks, Moscow has placed the Russian operations of Nestlé, Auchan, and Metro AG under “temporary management.” This move effectively separates formal ownership from operational control, as the state appoints administrators to manage these entities.

This trend follows similar actions previously taken against companies such as Danone and Carlsberg. The Kremlin justifies these measures by claiming that European nations are becoming more directly involved in the conflict through their support for Ukraine.

Simultaneously, the Russian domestic economy is facing significant pressure. Rising defense spending and declining revenues from oil and gas sales are contributing to a rise in retail prices. For the first time in six years, Russian income growth is projected to be slower than the increase in daily living expenses, with citizens spending nearly 40% of their earnings on food. Economists have noted signs of stagflation, particularly visible in the declining market for traditional motor vehicles due to soaring fuel costs.