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Russias Impact on Carlsberg Business: Insights from the CEO



Last Updated on November 2, 2023 by Robert C. Hoopes

Carlsberg Cuts All Ties with Russian Business Amid Asset Seizure Issue

Leading Danish brewer, Carlsberg, has officially ended its association with its Russian business, Baltika, after refusing to enter into a deal with Russia’s government to legitimize the seizure of assets. This move follows the trend of several Western companies exiting the country following the invasion of Ukraine.

Carlsberg had been attempting to sell its subsidiary in Russia since last year. However, in June, the company announced that it had found a buyer, only to face further setbacks when Russian President, Vladimir Putin, ordered the temporary seizure of Carlsberg’s stake in the local brewer the following month.

Jacob Aarup-Andersen, Carlsberg’s CEO, firmly stated that the company would not cooperate with Russia to legitimize the seizure, as they believe their business was unlawfully taken. The brewer had eight breweries and approximately 8,400 employees in Russia and faced a significant 9.9 billion Danish crown ($1.41 billion) write-down on Baltika in 2019.

Despite limited interactions with Baltika’s management and Russian authorities since July, Carlsberg has been unable to find an acceptable solution. As a retaliatory measure, the brewer has terminated license agreements for its brands in Russia, effectively prohibiting Baltika from producing, marketing, or selling Carlsberg products in the country.

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In response, Russia’s finance ministry has appointed the federal government property agency, Rosimushchestvo, as the temporary manager of the seized assets. The ministry claims that this does not alter the ownership structure of the business.

Carlsberg’s decision to sever ties with its Russian business marks a significant development in the ongoing conflict between Western companies and Russia. The move demonstrates the brewer’s refusal to cooperate with what it perceives as illegitimate actions by the Russian government. The long-term impact on Carlsberg’s operations and financial position remains to be seen, as the company seeks to navigate through this difficult situation.

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Phyllis J. Broussard is an accomplished writer and educator with a passion for MBA courses. With years of experience in both academia and industry, she has established herself as an expert in the field of business education. Her writing on MBA courses is highly regarded for its depth of insight and practical application.

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