Russia “stole our business”

By Jacob Gronholt Pedersen

COPENHAGEN (Reuters) – Carlsberg has cut all ties with its Russian business and is refusing to strike a deal with the Russian government that would make the seizure of the assets appear legitimate, the brewery’s new CEO said on Tuesday.

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

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

“There is no getting around the fact that they stole our business in Russia, and we will not help them make it appear legitimate,” said Jacob Aarup-Andersen, who took over as CEO in September.

Carlsberg, which had eight breweries and about 8,400 employees in Russia, took a 9.9 billion Danish crown ($1.41 billion) write-down on Baltika last year.

Aarup-Andersen said that Carlsberg was unable to find an acceptable solution to the situation due to limited interactions with Baltika management and Russian authorities since July.

“We will not enter into any transaction with the Russian government that somehow justifies them taking over our business illegally,” he said on a call with reporters after the company’s quarterly earnings release.

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

“If these licenses expire within the grace period, they will no longer be allowed to produce any of our products. Of course I can’t guarantee that that will happen, but that is our expectation,” said Aarup-Andersen.

($1 = 7.0168 Danish Kroner)

(Reporting by Jacob Gronholt-Pedersen; Editing by Jan Harvey)