Danish brewer Carlsberg to leave Russia

Danish brewer Carlsberg announced Monday it would pull out entirely from Russia over the country's invasion of Ukraine following a similar announcement from Dutch rival Heineken.

carlsberg crates
Carlsberg is to end its presence in Russia, one of the Danish brewer's biggest markets. File photo: Søren Bidstrup/Ritzau Scanpix

The move follows a strategic review of Carlsberg’s Russian operations announced on March 9th, which led to “the difficult and immediate decision to seek a full disposal of our business in Russia, which we believe is the right thing to do in the current environment,” the company said in a statement.

“Upon completion we will have no presence in Russia,” it said.

Carlsberg owns Russian brewer Baltika Brewery, whose employees represent a fifth of the beermaker’s global workforce.

“We deeply regret the consequences of this decision for our 8,400 employees in Russia,” it said.

“Until the completion of the process, we will maintain the recently announced reduced level of operations to sustain the livelihoods of these employees and their families,” Carlsberg chief executive Cees ‘t Hart said, adding that any profits generated would be “donated to relief organisations.”

In 2021, Carlsberg’s Russian business reported a revenue of 6.5 billion Danish kroner ($957 million, 874 million euros) and an operating profit of 682 million.

As a result of the decision, revenues from the Russian operations would not be included in the company’s earnings going forward, and the company said it would “later provide further details on the accounting impact of the planned disposal.”

Shares in Carlsberg were up over seven percent on the Copenhagen stock exchange following the announcement.

Heineken said its departure from Russia would cost the company 400 million euros.

READ ALSO: Denmark’s biggest brewery Carlsberg halts production and sales in Russia

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Danish brewer Carlsberg posts loss after Russia exit

Carlsberg reported a loss for the first half of the year on Wednesday as the Danish brewer's decision to exit Russia hit its bottom line despite surging sales.

Danish brewer Carlsberg posts loss after Russia exit

Russia accounted for nine percent of Carlsberg’s profits last year, but the group decided to sell its operations there, joining a foreign business exodus following Moscow’s invasion of Ukraine and Western sanctions against the country.

The group booked losses totalling 5.3 billion kroner ($721 million) in the first six months of the year.

But the company reported a 23 percent increase in revenue to 35.4 million kroner over the same period, pushed up by its Carlsberg and Tuborg brands.

Despite the loss, Carlsberg CEO Cees’t Hart said the group’s half-year results were now “well ahead” of pre-pandemic levels.

“We’re very satisfied with the strong set of results for the first half year in light of the severe challenges stemming from the war in Ukraine, rising commodity prices and energy costs, and the pandemic,” Hart said in a statement.

But he warned that “global uncertainty remains high”, with rising costs posing a challenge in coming quarters as inflation soars worldwide.