Carlsberg has cut all ties with its Russian business and refuses to enter a deal with Russia's government that would make its seizure of the assets look legitimate, the brewer's new CEO said on Tuesday.
The Danish group had since last year attempted to sell its Baltika subsidiary in Russia, following in the footsteps of many other Western companies exiting Russia since its invasion of Ukraine.
However, after announcing in June it had found a buyer for its business, Russian President Vladimir Putin the following month ordered the temporary seizure of Carlsberg's stake in the local brewer.
'Stolen Our Business'
"There is no way around the fact that they have stolen our business in Russia, and we are not going to help them make that look legitimate," said Jacob Aarup-Andersen, who took over as CEO in September.
Carlsberg had eight breweries and about 8,400 employees in Russia, and took a 9.9 billion Danish crown (€1.3 billion) write-down on Baltika last year.
Aarup-Andersen said that from the limited interactions with Baltika's management and Russian authorities since July, Carlsberg had not been able to find any acceptable solution to the situation.
"We're not going to enter into a transaction with the Russian government that somehow justifies them taking over our business illegally," he said on a call with journalists following the company's quarterly earnings statement.
Earlier this month, Carlsberg retaliated by ending license agreements for its brands in Russia that have enabled Baltika to produce, market and sell all Carlsberg products in the country.
"When these licenses run out with the grace period, they're not allowed to produce any of our products any more. Of course, I cannot guarantee that happens, but that is our expectation," said Aarup-Andersen.
Weak Consumer Sentiment
Meanwhile, Carlsberg on Tuesday reported third-quarter sales broadly in line with expectations but warned that weak consumer sentiment in Europe and Southeast Asia could impact beer markets negatively.
The world's third-biggest brewer said sales rose 0.3% to 20.3 billion Danish crowns (€2.7 billion) from 20.2 billion a year earlier, slightly below an estimated 20.4 billion in a company poll.
"We delivered solid revenue growth in a challenging environment," Carlsberg's new CEO Jacob Aarup-Andersen said in a statement.
"The growth was driven by continued strong revenue per hectolitre improvement and outperformance by our premium portfolio," he said.
Share Buy-Back Program
Carlsberg reiterated its full-year organic operating profit of 4% to 7% after it hiked its outlook for a second time in August this year.
Carlsberg also on Tuesday launched a new quarterly share buy-back program of 1 billion Danish crowns.
Article by Reuters, additional reporting by Hospitality Ireland.