Things have gone from bad to worse for the Carlsberg Group. Their breweries in Russia have been taken over by the state and now two of their Russian executives have been arrested.
Here’s the deal…
On February 24th 2022, Russia invaded Ukraine in an escalation of the Russo-Ukrainian War which began in 2014. That action led many international breweries to sell their operations and exit in the authoritarian state.
Anheuser-Busch was able to sell its joint stake with Turkish brewer Anadolu Efe and successfully exit the country. Reacting to the still ongoing war, Heineken announced plans to sell off its Russia business after a strategic review concluded it was “no longer sustainable nor viable in the current environment,” and they got out as well.
Like Anheuser-Busch and Heineken, Carlsberg had also pledged to cut ties with Russia.
But in spite of the Carlsberg Group’s announced plans to exit the country by the end of 2022, the process of separating its operations in Russia from the rest of its business was challenging.
In June of 2023 the Danish brewing giant announced last that it had signed an agreement to sell its business in Russia, Baltika Brewing, subject to regulatory approval.
“The signing of an agreement to sell the Russian business is a very important milestone in the highly complex separation and selling process,” Group CEO Cees’t Hart said at that time….
“While it has been an extensive process, it has been important for us to reach the best possible solution for all stakeholders, including our more than 8,000 employees in Russia. We now look forward to receiving the necessary regulatory approvals.”
Then in July the Russian state announced that it had taken control of both Baltika Breweries, which brews Carlsberg in that country, effectively ending Carlsberg’s sales prospects.
According to the Putin-backed presidential decree, foreign-owned stakes in Danone Russia and Baltika Breweries were being put under the temporary management of the Russian government property agency Rosimushchestvo, a mandate that remains in place.
But Russia wasn’t done…
In November, 2023 Baltika Breweries chief executive Denis Sherstennikov and vice president legal Anton Rogachevsky were arrested by the Russian state and accused of fraud – charges, charges Carlsberg refutes.
Speaking to the Drinks Business, a spokesperson for Carlsberg said…
“We are heartbroken by the news of the arrest of two Baltika employees yesterday in Russia along with allegations against several others. It is appalling that the efforts of the Russian state to justify their illegal takeover of our business in Russia has now evolved into targeting innocent employees.”
“The allegations reported in Russian media are fake,” the company added.