Carlsberg Ends Licence Agreements In Russia

By Reuters
Carlsberg Ends Licence Agreements In Russia

Danish brewer Carlsberg said on Tuesday it had ended licence agreements for its brands in Russia, retaliating against what it described as Moscow's illegitimate takeover of its Russian breweries in July.

Russian President Vladimir Putin ordered the temporary seizure of Carlsberg's Russian stake in local brewer Baltika in July, along with French yoghurt maker Danone's Russian subsidiary, demonstrating the risks for Western companies that have not managed to exit Russia since its invasion of Ukraine.

Carlsberg said it had informed Baltika that the licence agreements enabling it to produce, market and sell all Carlsberg Group products, including international and regional brands, had been terminated.

'Unacceptable Terms'

"We have now concluded that we currently see no path to a negotiated solution for exiting Russia," Carlsberg said in a statement. "We refuse to be forced into a deal on unacceptable terms, justifying the illegitimate takeover of our business in Russia."

Baltika will be able to use existing stock and materials from Carlsberg until April 1, 2024, the Danish brewer said.


Other companies leaving Russia over its invasion of Ukraine have faced difficulties in keeping control over their trademarks and brands, lawyers have told Reuters.

'Exit Requirements'

Russian court filings dated Sept. 25 showed that Baltika had sought to compel Rospatent, Russia's intellectual property agency, to ignore any requests from Carlsberg to terminate its access to brands such as Tuborg and Kronenbourg.

The court rejected Baltika's request.

Russia has steadily tightened exit requirements since Western companies started leaving soon after Moscow began what it calls a "special military operation" in Ukraine in February 2022. Executives say navigating the rules is becoming harder.

Finnish utility Fortum, whose Russian assets were also placed under the "temporary management" government property agency Rosimushchestvo, told Reuters in August that the seizure had come as a surprise. On Tuesday, Carlsberg echoed that sense of unpredictability.


'Temporary Management'

"It is unclear what formally will be the next steps in relation to Baltika," Carlsberg said.

"We retain title to the shares in the company while the temporary management is transferred to the Russian state. What the Russian state chooses to do under these circumstances is not clear," the group added.

Eight Breweries

Carlsberg had eight breweries and about 8,400 employees in Russia, and took a 9.9 billion crown (€1.32 billion) write-down on Baltika last year.

Carlsberg said on Tuesday it would fully impair the value of its Russia business, without giving a figure.