Carlsberg Defiant Stand: In a resolute move, Carlsberg has completely disengaged from its Russian business and taken a firm stance against any deal that would lend legitimacy to the seizure of its assets by the Russian government, according to the brewing company’s new CEO, Jacob Aarup-Andersen.
The Danish conglomerate had been in the process of selling its Russian subsidiary, Baltika, since last year, in line with the trend of Western companies exiting Russia following the Ukrainian invasion. However, things took a dramatic turn when, in June, Carlsberg announced the discovery of a buyer for its business, and Russian President Vladimir Putin, in the subsequent month, ordered the temporary seizure of Carlsberg’s stake in the local brewery.
Jacob Aarup-Andersen, who assumed the role of CEO in September, asserted, “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.”
At the time, Carlsberg had eight breweries and approximately 8,400 employees in Russia, and it incurred a write-down of 9.9 billion Danish crowns ($1.41 billion) on Baltika in the previous year.
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Aarup-Andersen explained that, despite limited interactions with Baltika’s management and Russian authorities since July, Carlsberg had been unable to find an acceptable resolution. He stated, “We’re not going to enter into a transaction with the Russian government that somehow justifies them taking over our business illegally.”
In response to the events, Carlsberg retaliated by terminating license agreements that allowed Baltika to produce, market, and sell Carlsberg products in Russia. Aarup-Andersen noted, “When these licenses expire with the grace period, they won’t be allowed to produce any of our products anymore.”
Russia’s finance ministry clarified that the federal government property agency, Rosimushchestvo, had been appointed as a temporary manager, wielding the powers of the owner, except for property disposal rights. The finance ministry emphasized that this temporary management didn’t alter the ownership structure. The CEO’s unwavering stance against the asset seizure and the repercussions on Carlsberg’s operations mark a significant development in the company’s relationship with its Russian business and the Russian government.