Russia Seizes U.S. Food Company to Supply Military Amid Ongoing Conflict

Russia is set to utilize a company formerly owned by an American, whose assets have been confiscated, to provide food supplies for its armed forces, according to a report by Reuters published on Thursday that referenced an acquired document.

In October 2024, President Vladimir Putin mandated the appropriation of Glavprodukt, the largest canned food manufacturer in the country, placing it under temporary state control. This action marks the first instance of nationalization affecting an American shareholder in the series of foreign company seizures that have occurred since the onset of the invasion of Ukraine.

A letter, which was reviewed by Reuters and addressed to the Prosecutor General, indicated that the new leadership of Glavprodukt justified the takeover by stating that it was essential to ensure reliable food production for the National Guard and the Defense Ministry.

Prior to its seizure, Glavprodukt had never supplied the military, as noted by a source familiar with the situation shared with Reuters.

After the acquisition, Leonid Smirnov, the U.S. businessman who owned Glavprodukt, faced allegations of transferring about 1.38 billion rubles (approximately $17 million) out of Russia between 2022 and 2024, in violation of the country’s wartime capital withdrawal restrictions.

The Prosecutor General’s Office further accused Smirnov of attempting to obstruct Glavprodukt’s food deliveries to military fronts and persuading employees not to cooperate with the new management, allegedly driven by a desire for revenge regarding the takeover.

Smirnov has refuted any claims of misconduct.

The appropriation of Glavprodukt seems likely to favor business entities associated with Alexander Tkachev, a former agriculture minister currently under Western sanctions, as per the Reuters report.

Leonid Smirnov established Glavprodukt in 1999. A Soviet Union native, he emigrated to the U.S. in the 1970s, established a successful career, and returned to Russia in 1995.

Currently, the company operates three major production facilities that create a variety of canned meats, condensed milk, and preserved fish and vegetables. By the end of 2024, Smirnov estimated that the company controlled around 10% of the canned meat market in Russia, 7% of the dairy market, and up to 3% of the fish market.

In April 2023, Putin authorized the government to take possession of the Russian assets of foreign firms from nations designated as “unfriendly,” a decision largely interpreted as retaliation against the West for freezing approximately $300 billion in Russian state assets.