Moscow has taken temporary control of Baltika Breweries, owned by Carlsberg Group
Danish brewer Carlsberg Group was “shocked” when the Russian government imposed temporary management over the company’s assets in the country, CEO Cees ‘t Hart said on Wednesday.
According to Hart, the world-famous brewer, which had been operating eight production facilities in Russia, is still hoping to sell off its business in the sanctions-hit country. The company announced its exit from Russia in March 2022.
Last month, Russian President Vladimir Putin signed an order to temporarily freeze the Russian assets of Baltika Breweries, controlled by Carlsberg, and Danone Russia, operated by French parent company Produits Laitiers Frais Est Europe.
All foreign shares of the firms were handed over to the Russian Federal Property Management Agency. The decision covered more than 99% of shares within Baltika Breweries’ registered capital and more than 83 million Danone Russia shares.
“We’re assessing the situation and the legal consequences of this highly unexpected move and will seek to protect our assets and the value of the business,” Hart said in a trading update covering the first six months of the year.
The brewer “still considers it probable that it can achieve a disposal of the business, though the conditions are currently very uncertain,” the CEO stated, adding that Moscow’s move could impact “parts of the continuing business and structures outside Russia”
Last year, the group took a 9.9 billion krone ($1.5 billion) write-down on its Russian Baltika subsidiary. Under the Russian presidential decree, the Danish beverage giant retained ownership of the unit but no longer has any control or influence over it.
“Technically, this is not a nationalization, but how it will unfold is unclear for us at this point in time,” Hart told Reuters. “This latest development will make it even more painful to leave Russia.”
According to the brewer, the net loss from Russian operations put up for sale amounted to 404 million krone ($59 million), with Baltika Breweries to be deconsolidated from July.
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