icon bookmark-bicon bookmarkicon cameraicon checkicon chevron downicon chevron lefticon chevron righticon chevron upicon closeicon v-compressicon downloadicon editicon v-expandicon fbicon fileicon filtericon flag ruicon full chevron downicon full chevron lefticon full chevron righticon full chevron upicon gpicon insicon mailicon moveicon-musicicon mutedicon nomutedicon okicon v-pauseicon v-playicon searchicon shareicon sign inicon sign upicon stepbackicon stepforicon swipe downicon tagicon tagsicon tgicon trashicon twicon vkicon yticon wticon fm
8 Feb, 2024 15:15

Russia exit cost EU beer giant $5.9 billion

Carlsberg Group had previously announced having de-consolidated Baltika Breweries, its Russian business
Russia exit cost EU beer giant $5.9 billion

The financial loss sustained by Danish brewing multinational Carlsberg Group due to its exit from Russia amounted to 40.8 billion Danish krone ($5.9 billion), according to the company’s full-year 2023 earnings report released on Wednesday.

Last year, Russian authorities took temporary control of the local assets of the Copenhagen-based company, which used to operate Baltika Breweries. The move affected more than 99% of the shares within Baltika Breweries’ registered capital.

Prior to that, Carlsberg, which employed nearly 8,400 people in Russia, had been looking to sell the business amid intense international pressure on consumer brands to leave Russia in light of Moscow’s military operation in Ukraine.

The company’s local operations were handed over to the Russian Federal Property Management Agency, Rosimushchestvo. Carlsberg CEO Jakob Orup-Andersen later characterized the move as “stealing” the company’s business in Russia.

In October 2023, in response to the transfer, Carlsberg Group wrote down the entire value of its Russian business and terminated the agreements allowing its local subsidiary to produce, promote, and sell Carlsberg products.

The Russian brewer Baltika retaliated by filing a lawsuit to invalidate Carlsberg’s refusal to supply and license the Tuborg, Kronenbourg, Seth & Riley’s Garage, Holsten, and LAV brands. The court upheld Baltika’s claim, allowing it to continue to use the brands.

While the loss of Baltika pushed Carlsberg into a loss for the year, the Danish group reported a 4.7% increase in sales to 73.6 billion kroner ($10.6 billion), driven by price increases to offset higher costs due to soaring inflation.

For more stories on economy & finance visit RT's business section