Carlsberg says Moscow steals its Russian business

stock photo: GETTY IMAGES

The Danish brewer Carlsberg, which has severed all ties with its Russian business, refuses to strike a deal with the Russian government that would make Moscow’s seizure of assets legitimate.

Source: CNN, citing a statement of the company’s CEO Jakob Aarup-Andersen.

Since last year, the Danish group has been trying to sell its Baltika subsidiary in Russia, following in the footsteps of many other Western companies that left Russia after its invasion of Ukraine.

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However, after Carlsberg announced in June that it had found a buyer for the business, the following month, Russian President Vladimir Putin ordered the temporary seizure of Carlsberg’s stake in a local brewery.

“There is no way around the fact that they have stolen our business in Russia, and we are not going to help them make that look legitimate,” Aarup-Andersen said.

Carlsberg had eight breweries and about 8,400 employees in Russia, and last year wrote down the value of Baltika by DKK 9.9 billion (US$1.41 billion).

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Due to limited interaction with Baltika’s management and the Russian authorities, Carlsberg has not been able to find any acceptable solution to the situation since July.

“We’re not going to enter into a transaction with the Russian government that somehow justifies them taking over our business illegally,” he told reporters.

Earlier this month, Carlsberg responded by terminating licensing agreements for its brands in Russia that allowed Baltika to produce, market and sell all Carlsberg products in the country.

“When these licenses 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,” the CEO added.

Background:

• The Danish brewery Carlsberg Group announced that it is revoking Baltika’s licences that allowed it to produce and sell its products.
• Russian dictator Vladimir Putin transferred foreigners’ stakes in Baltika and its Danone subsidiary to the Federal Agency for State Property Management (Rosimushchestvo), and the companies previously announced the sale of their assets in Russia. 
• Taimuraz Bolloyev, the new head of the Baltika brewery, which Putin put under the temporary management of Rosimuschestvo, owns the largest manufacturer of uniforms for Russian soldiers.
• Danish beer producer Carlsberg was “shocked” by the Russian authorities’ decision to seize its Russian assets, the Baltika breweries, last month: the company is now no closer to understanding what might happen next.

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