- The CEO of Danish brewer Carlsberg says Moscow has “stolen” its business in Russia.
- Moscow seized Carlsberg’s assets in July, weeks after the brewer announced it had found a buyer for its Russian business.
- Carlsberg said it’s cutting ties with its Russian business as it can’t find an acceptable solution to resolve the issue.
Danish brewer Carlsberg operates eight breweries and employs more than 8,000 people through its Russian unit, Baltika Breweries. But, as of early October, the brewer has had it: It has ended its relationship with Baltika Breweries.
“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,” Carlsberg CEO Jacob Aarup-Andersen said on a call on Tuesday after posting third-quarter earnings.
“The Carlsberg Group refuses to be forced into a deal on unacceptable terms to justify the illegitimate takeover of our business in Russia,” the company said in its third-quarter trading statement.
Aarup-Andersen’s comments come weeks after Carlsberg terminated all its license agreements with Baltika in early October, meaning Baltika could no longer produce, market, or sell Carlsberg’s products in Russia.
On Wednesday, former Russian president Dmitry Medvedev mocked Carlsberg’s statement that Moscow had robbed the brewer’s assets.
Medvedev wrote in a Telegram post that Carlsberg had “abandoned everything in Russia for political reasons” and refused to fulfill obligations to contractors to the country, according to a Reuters translation.
“And they thought they’d be left alone,” he added.
A brief timeline of Carlsberg’s troubles in Russia
Carlsberg’s announcement comes after a tumultuous several months for the company in Russia.
Like many other foreign businesses, Carlsberg had been trying to sell its Russian subsidiary in the aftermath of Russia’s invasion of Ukraine. The brewer announced on June 23 that it had found a buyer for Baltika.
However, on July 16, Russia seized Baltika. The move came as Moscow was stepping up its economic war with the West, spooking foreign investors who were still operating in the market more than a year after the Ukraine war started.
Carlsberg’s planned exit — first announced last year — was a substantive hit to the company, as the market accounted for 10% of its overall revenue and 6% of its operating profit in 2021. The brewery booked a 9.5 billion Danish kroner, or $1.4 billion, write-down from its planned asset disposal last year.
Difficulties exiting the Russian market
Sanctions-hit Russia has made it increasingly difficult for foreign companies to leave its market.
Just recently, Moscow announced that Western firms that want to exit Russia must sell their holdings in the ruble, the Financial Times reported on Tuesday. The move aims to prop up the floundering ruble, which has tanked 20% against the US dollar so far this year. It could delay corporate exits and cause foreign currency transfers for companies leaving the market.
Carlsberg is not the only major Western company to be seized by Russian authorities. Moscow also seized the operations of French food giant Danone’s subsidiary in July. In April, Moscow took control of the subsidiaries of Germany’s Uniper and Finland’s Fortum.
Russia’s tactics to pressure foreign firms to stay in the country instead of making speedy exits appear to have some impact. British consumer goods giant Unilever, for one, is continuing to operate in Russia. The company said in February that abandoning its business in Russia would allow its assets in the country to be seized and operated by the state.
Russia’s finance ministry did not respond to a request for comment from Insider.
