French dairy group Danone (DANO.PA) is reviewing its legal options after the Russian state took control of its subsidiary in the country, a source close to the matter told Reuters on Monday.
The source said Danone would write to the Kremlin and was in contact with French authorities, including President Emmanuel Macron's office. The letter will ask for explanations, but Danone does not yet know what is legally feasible, the source added, declining to be named because the matter is confidential.
According to a decree signed by President Vladimir Putin on Sunday, foreign-owned stakes in Danone Russia, along with beer company Carlsberg's (CARLb.CO) stake in a local brewer were put under the "temporary management" of government property agency Rosimushchestvo.
Moscow's action highlights the vulnerability of other consumer products companies that still have operations in Russia, some of which have announced plans to leave. Dove soap maker Unilever (ULVR.L) and Swiss food giant Nestle (NESN.S) remain in Russia, as well as British American Tobacco, which is trying to sell its unit.
The source close to the matter said Danone had been weeks away from achieving an agreement to sell its Russian subsidiary, which has 7,500 employees spread across 13 factories.
The source said Danone, like everyone else, had learnt the news when the Russian presidency announced it to the media and had been very surprised, especially as the company had "initiated a very organised process to leave the country".
Nestle, BAT, Reckitt and Procter & Gamble (PG.N) declined to comment on Monday's news, while Unilever did not respond to a request for comment.
Unilever had in February said there was a risk it might have to stop doing business in Russia, and that it might have to take a loss or write down its assets there.
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