Denmark & Russia: Carlsberg cuts ties with 'stolen' Russian business

Carlsberg has announced it has terminated its business in Russia after the Kremlin took control of its operations in the country, BBC reported on October 31.

The beer company said it refused to be "forced into a deal on unacceptable terms to justify the illegitimate takeover" of its Russian business.

Carlsberg was in the process of selling its Baltika Breweries subsidiary in Russia before management was taken over by the state in July.

The boss of the Danish brewer said the Russian government had "stolen our business in Russia".

"We are not going to help them make that look legitimate," said chief executive Jacob Aarup-Andersen.

Since the invasion of Ukraine in February last year, many Western companies have come under pressure to leave Russia and shut down operations.

Carlsberg was one of many trying to sell its business in the country, and said in June last year that it had signed an agreement to sell Baltika Breweries but had not yet completed the deal.

But in July, Russia took control of Baltika under an order signed by President Vladimir Putin. Moscow introduced rules earlier this year allowing it to seize the assets of firms from "unfriendly" countries.

Baltika produces some of the most recognisable beer brands in Russia, with 8,400 employees across eight plants, according to Carlsberg's website.

Brands owned by the group include Kronenbourg 1664, Tuborg, Brooklyn and Somersby cider.

In a trading update on October 31, the brewer repeated that it could not see a "viable path to a negotiated solution for exiting Russia".

"We're not going to enter into a transaction with the Russian government that somehow justifies them taking over our business illegally," said Mr Aarup-Andersen.

The company said it had informed Baltika that it had terminated all of its licence agreements to produce, market and sell its products in the country, but said there would be a run-off period until 1 April 2024 while existing stock is used up.

But the company said the future of Baltika remained unclear.

"When these licences run out with the grace period, they're not allowed to produce any of our products any more. Of course, I cannot guarantee that happens, but that is our expectation," Mr Aarup-Andersen added.

The Danish brewer reported sales in the three months to the end of September broadly in line with expectations, but said volumes in western Europe were impacted by cold and wet weather in July and August.

The world's third-biggest brewer said sales were 20.3bn Danish kroner (£2.4bn; $2.9bn), up marginally from 20.2bn kroner a year earlier.

But it warned that weak consumer sentiment in Europe and South East Asia could impact beer markets negatively towards the end of the year.

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