Kremlin transfers control of German retailer Metro’s Russia business

FRANKFURT, Germany (AP) — President Vladimir Putin has ordered the Russian assets of German retailer Metro AG placed under temporary administration. The step comes against a background of tension between Germany and Russia over the war in Ukraine.

The order, posted Monday on the government website, did not state a reason. The step follows similar steps against the Russia businesses of global food company Nestle and French retailer Auchan under a 2023 decree aimed at businesses associated with “unfriendly countries.”

Temporary administration has led to local owners taking over the Russia businesses of French dairy concern Danone and Danish brewer Carlsberg at knockdown prices.

Metro said in a statement that although Metro Russia formally belonged to it, it had no further operational control over the business. The Kremlin order placed the assets under the administration of UK Torg Rus, described in the Metro news release as “a company of Metro Russia CEO Johannes Tholey.”

Metro said it had been reducing its connections to the Russia business since the 2022 Russian invasion. It said that “further consequences of the decree on Metro AG are currently being analyzed.” Metro has 9,000 employees in Russia.

Germany has concluded that Russia was responsible for an attempted drone attack at the Leipzig airport and closed a Russian consulate in Bonn and a Russian cultural center in Berlin. Russia in response closed the German consulate in St. Petersburg. Moscow denied the allegations.

Russian Foreign Minister Sergey Lavrov met his German counterpart Johann Wadephul on Saturday on the sidelines of the U.N. General Assembly but was dismissive afterward, saying that Wadephul “simply reiterated his official public position condemning Russia… you can judge for yourself whether that counts as dialogue or not.”

“The Russians are raising the pressure on Germany in their hybrid war,” said Stefan Meister, a Russia expert at the German Council on Foreign Relations. “It’s being made clear that the Germans could lose even more companies and assets in Russia, in order to raise pressure on the German government from the German business community.”

Meister said that Russia sees Germany “as a key adversary since it is Ukraine’s most important single supporter.”

Some major Western businesses ceased operating in Russia and wrote off their businesses after 2022. Since then the Kremlin has imposed burdensome conditions for disposing of local affiliates, demanding they be sold at a steep discount and subject to exit taxes and government approval. Other companies have scaled back their operations, while others continue to do business as usual.