The Kremlin is planning to use a confiscated US company to supply food to its military.

Source: Reuters, citing a document

Details: A letter reviewed by Reuters from canned food manufacturer Glavprodukt – the only American-owned company in Russia to be placed under new state management after being seized in October – states that the takeover was necessary to stabilise production, particularly for future supplies to the Russian National Guard and Ministry of Defence.

Glavprodukt is now under the control of Rosimuschestvo, Russia's state property management agency, after being seized from its Los Angeles-based founder, Leonid Smirnov.

The Kremlin-aligned Russian news agency RBC reported in March that prosecutors have accused Smirnov and his affiliated companies of transferring approximately RUB 1.38 billion (US$17 million) out of Russia between 2022 and 2024.

Glavprodukt's property was seized by the Moscow Arbitration Court on 12 March at the request of the Prosecutor General's Office, with a hearing scheduled for 18 April. Smirnov denies any wrongdoing, describing the case as a "Russian-style corporate raid" intended to take over his business.

Around a dozen European companies have also lost their Russian subsidiaries due to decrees issued by Russian leader Vladimir Putin. Among them are Danish brewing giant Carlsberg and Finnish energy firm Fortum. The Kremlin has signalled that such confiscations may continue.

Initially, the Kremlin had counted on a swift victory in Ukraine, but the war has dragged on for more than three years. This has compelled Russia to drastically ramp up military spending and tighten its grip on strategic assets. In 2022, Moscow struggled to secure essential military supplies, even including food.

Background:

• Putin ordered the Russian Cabinet of Ministers (government) to prepare for the comeback of Western companies.
• Following the intensification of negotiations between the US and Russia, one of the Western companies received calls inviting them to re-enter the Russian market.

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