Russia has 'stolen our business', Carlsberg chief says as brewer reports drop in volume

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 chief executive said on Tuesday.

The Danish group has since last year been trying 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 the company announced 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.

"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 chief executive in September.

Carlsberg had eight breweries and about 8,400 employees in Russia, and took a 9.9 billion kroner (£1.16bn) 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.

"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.

Carlsberg reported a drop in beer sales by volume in the third quarter of 2.1 per cent, blaming wet summer weather.

Revenue edged higher to 20.3 billion kroner (£2.39bn). The company does not release quarterly profit figures.

This month, Carlsberg retaliated by ending license agreements for its brands in Russia that have enabled Baltika to produce, market and sell 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," Aarup-Andersen said.

Russia's finance ministry said that Rosimushchestvo, the federal government property agency, has been appointed as a temporary manager, exercising the powers of the owner with the exception of the powers to dispose of property.

"At the same time, the introduction of temporary management does not entail a change in the ownership structure," the finance ministry's media service said in a statement.

(Reuters)