Russia nationalizes assets of US-possessed food leading firm
Date
10/16/2024 5:39:33 AM
(MENAFN) In a significant move, Russian President Vladimir Putin has signed a decree to temporarily nationalize the Russian operations of a major U.S.-owned food manufacturer. This action affects Glavproduct, a holding company and its subsidiaries, including three canning plants, which have now been transferred to the Russian federal Property Management Agency, known as Rosimushchestvo. Additionally, the parent company, Promselkhozinvest, owned by the U.S.-registered Universal Beverage Company, will also come under government control.
Founded in 1999 by Leonid Smirnov, a Russian-born U.S. businessman who returned to Russia seeking new market opportunities, Glavproduct has established itself as a leading producer of canned goods in the country. The company boasts a diverse portfolio with over 500 brands, including canned meat, condensed milk, and various canned fish and vegetables.
This decree comes as part of a broader strategy initiated by the Kremlin in April 2023, which allows for the temporary takeover of assets belonging to foreign companies from nations deemed "unfriendly." At that time, Rosimushchestvo was tasked with overseeing the Russian subsidiaries of key foreign firms, including the Finnish energy company Fortum and Germany's Uniper, both of which are critical to Russia's energy security.
The Russian government has framed this move as a response to the actions of Western states regarding foreign assets owned by Russian companies. This nationalization trend is not new; in July 2023, Russia also temporarily took control of the local operations of French food giant Danone and Baltika Breweries, which was owned by Denmark's Carlsberg Group. While Danone's local business was eventually removed from state management, the nationalization of foreign-owned companies in Russia reflects ongoing geopolitical tensions and economic strategies amidst the backdrop of international sanctions.
As the situation develops, the implications of these nationalization efforts on foreign investments and the broader Russian economy will be closely monitored. The Kremlin's actions are indicative of a strategy to bolster domestic production and control over critical sectors while navigating the complexities of international relations.
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