In a surprising turn of events, Moscow has appointed Yakub Zakriev, a Chechen minister with close ties to the region’s leader Ramzan Kadyrov, as the new head of Danone’s Russian subsidiary. This move comes after Russia took control of the French yogurt maker’s business, amid the wider backdrop of international tensions following the invasion of Ukraine.
Mr. Zakriev’s appointment has raised eyebrows due to his prominent roles as both the Deputy Prime Minister and Agriculture Minister of Chechnya, making him a highly influential figure in the region. Furthermore, reports suggest that he is the nephew of Chechen leader Ramzan Kadyrov, who is known to be a key ally of Russian President Vladimir Putin. The appointment, therefore, carries significant political implications.
The takeover of Danone and beer giant Carlsberg’s Russian units by the Russian state has been initiated through new rules introduced by President Putin, enabling Moscow to seize assets of companies from countries considered “unfriendly.” As major Western corporations ceased their operations in Russia following the Ukraine invasion, Danone and Carlsberg were in the process of selling their Russian businesses.
Carlsberg’s Russian business, Baltika Breweries, was also placed under the “temporary management” of the state, with Taimuraz Bolloev appointed as its director. The implications of this development on Carlsberg’s ongoing operations and the sale process remain uncertain.
The situation has left Danone facing a significant financial hit, with the estimated €1 billion loss resulting from the sale of their Russian business. The French company had been investigating the situation before the state takeover occurred.
While the Kremlin spokesperson, Dmitry Peskov, has yet to respond to media inquiries, the swift and unexpected actions by the Russian government have raised concerns about the business environment in the country.
Baltika Breweries, known for producing some of Russia’s most recognizable beer brands and employing 8,400 individuals across eight plants, is now subject to Russian state control, leading to uncertainties about its future operations.
The appointment of Yakub Zakriev and the seizure of foreign companies’ assets in Russia are indicative of the escalating tensions between Russia and Western nations. As international sanctions continue to impact business dealings, the situation remains fluid, leaving businesses and investors on edge regarding the safety and stability of their interests in the region.