Carlsberg is facing a challenging situation in Russia as its brewery has been seized by the Kremlin. The Danish drinks giant has lost contact with its employees in the country following the seizure. Cees ‘t Hart, Carlsberg’s CEO, expressed shock at Russia’s decision to take control of its subsidiary, Baltika Breweries, last month. Despite striking a deal to sell the business, it was seized under a presidential decree signed by Vladimir Putin. Carlsberg still technically owns the division but has no control over it. The company had “limited contact” with local authorities and no indication of why the Russian state took over the business. Mr. ‘t Hart stated that the decision was unprecedented and unexpected.
Carlsberg had announced the sale of its Russian business in June and was optimistic about it. However, shortly after the announcement, a presidential decree temporarily transferred management of the business to a Russian federal agency. This move comes as Russia grants itself new powers to seize assets from Western businesses amidst the ongoing war in Ukraine.
Other well-known companies, such as Unilever and Bacardi, have also faced criticism for continuing their operations in Russia despite the conflict in Ukraine. Unilever, the owner of brands like Marmite and Dove, was labeled “an international sponsor of war” by the Ukrainian government. Bacardi was added to the Ukrainian National Agency for Corruption Prevention’s list of alleged war sponsors for failing to halt operations.
Despite the challenges in Russia, Carlsberg reported an increase in organic revenues of 11.2% across its global business in the first half of the year. However, the volume of beer sold only rose by less than 1%.
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