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Russian Government’s Seizure of U.S. Firm Raises Concerns
LONDON (Reuters) – A newly uncovered document indicates that the Kremlin plans to utilize Glavprodukt, an American-owned food manufacturer that was seized and placed under state control, to support the Russian military with food supplies. This development occurs amidst delicate negotiations between the United States and Russia aimed at de-escalating the conflict in Ukraine and may complicate diplomatic relations between the two nations.
Glavprodukt, which was taken under state management in October, is notably the first American-owned entity to face such drastic measures. U.S. Secretary of State Marco Rubio has hinted that the handling of Glavprodukt will be a significant topic in discussions related to recalibrating U.S.-Russia ties.
In a correspondence addressed to Russia’s prosecutor general, the new management of Glavprodukt argued that the seizure was necessary to ensure uninterrupted production, especially for future supplies to the national guard and the defense ministry.
Currently, Glavprodukt is under the administration of Rosimushchestvo, Russia’s federal property management agency, following its takeover from Leonid Smirnov, a businessman from Los Angeles.
Requests for comments from Russia’s industry and trade ministry, as well as Rosimushchestvo, regarding their intentions for Glavprodukt and its new leadership, have gone unanswered.
Russian authorities have accused Smirnov and related businesses of transferring approximately 1.38 billion roubles ($17 million) out of the country in recent years, as reported by RBC daily earlier this year.
The Moscow Arbitration Court authorized the seizure of Glavprodukt’s assets on March 12, at the request of the prosecutor general’s office, with a hearing scheduled for April 18. Smirnov has denied any wrongdoing, claiming that the lawsuit is a “Russian-style corporate raid” intended to expropriate his business.
So far, the prosecutor general’s office has not responded to inquiries for comments.
Numerous European firms, including Carlsberg and Fortum, have experienced similar asset seizures in Russia, following official presidential decrees. The Kremlin has signaled that further confiscations may occur, reflecting an aggressive shift in asset management.
Initially anticipated to be a swift operation, the invasion of Ukraine has now persisted for over three years, prompting Russia to increase defense expenditures and assert greater control over essential assets, including previously critical supplies like food.
The Implications of the Seizure for Stakeholders
The document concerning Glavprodukt’s management sheds light on the potential beneficiaries of this expropriation. According to the letter, Rosimushchestvo appointed the new director general of Glavprodukt at the behest of Druzhba Narodov, a prominent food producer.
Druzhba Narodov previously served as the sole supplier to Russia’s national guard between 2019 and 2020, as noted in a press release from 2018.
A source familiar with the situation indicated that Glavprodukt had not historically supplied the military before this change.
An investigation by the Anti-Corruption Fund, founded by the late opposition leader Alexei Navalny, revealed that in 2017, then-President Dmitry Medvedev had authorized Druzhba Narodov to be the exclusive supplier for the national guard.
Although the ownership structure of Druzhba Narodov is classified, reports from Russian outlet Kommersant in 2022 suggested ties between Druzhba Narodov and the agricultural holding known as ‘Agrocomplex named after N. I. Tkachev.’ This speculation is based on prior information from Russia’s EGRUL corporate registry.
While this information could not be independently verified, both Druzhba Narodov and Agrocomplex share identical domain names for certain email addresses, according to their corporate registration filings.
Attempts to obtain comments from Druzhba Narodov and Agrocomplex were unsuccessful; however, it is noteworthy that the ultimate ownership of Agrocomplex is attributed to Alexander Tkachev, as reported in the company’s 2025 independent audit filings.
Tkachev has faced sanctions from the European Union since 2014 over his role in supporting the annexation of Crimea. He subsequently became Russia’s agriculture minister the following year and currently serves as the chairman of the holding company’s board.
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