Danone reviews legal options after Russia seizes local business

FRENCH dairy group Danone 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 (Jul 17).

The source said the company would write to the Kremlin and was in contact with French authorities, including President Emmanuel Macron’s office.

“Danone is going to write a letter to the Kremlin and is studying the legal remedies, but in this kind of country, it is not easy to exercise your rights,” the source, who declined to be named because the issue is confidential, said.

According to a decree signed by President Vladimir Putin on Sunday, foreign-owned stakes in Danone Russia, along with beer company Carlsberg’s stake in a local brewer were put under the “temporary management” of government property agency Rosimushchestvo.

The source close to the matter said Danone had been near to an agreement to sell its Russian subsidiary, when news of the decree broke.

“Danone learned the news at the same time as everyone else, when the press release from the Russian presidency came out.

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“The company is very surprised because they had initiated a very organised process to leave the country, involving the local authorities at every key moment,” the source said.

“They were about to close a deal, at least to propose a buyer to the commission in charge. We are talking about a few weeks,” the source added, without naming the potential buyer.

The source said Danone was reassured that the state takeover was supposed to be temporary, but he added: “The notion of time there is not the same as ours.” REUTERS