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

Danish brewer Carlsberg, the world's fourth biggest beer producer, said Wednesday it was halting production and sales in Russia due to Moscow's invasion of Ukraine.

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

“We stand alongside the Ukrainian people and people around the world in condemning the Russian invasion in the strongest possible terms”, the group said in a statement.

It said it could therefore not conduct “business as usual” in Russia.

Last week, the group announced that it would halt new investments and exports from Carlsberg into Russia.

“Since then, we have ceased all advertising by both the Carlsberg Group and Baltika Breweries in Russia, and we will stop producing and selling our flagship brand, Carlsberg, in the Russian market”, it said.

Carlsberg has been a majority owner of Baltika Breweries since 2008 and the latter employs 8,400 people, representing more than one in five of Carlsberg’s total global workforce.

Baltika Breweries will continue to operate — but as a separate business — “with the purpose of sustaining our employees and their families”.

Carlsberg said its “first priority remains the safety and wellbeing of our more than 1,300 colleagues in Ukraine”, and said it was helping provide shelter, transport, food and fresh water to employees and others in Ukraine and neighbouring countries.

But it said it also felt “a moral obligation to our Russian colleagues who are an integral part of Carlsberg, and who are not responsible for the actions of the government”.

The Danish group said that, during the humanitarian crisis, any profits generated by its business in Russia would be donated to relief organisations.

In 2021, Russia and Ukraine accounted for approximately 13 percent of the Carlsberg group’s revenue and approximately nine percent of operating profit.

The developments in Russia and Ukraine would “negatively impact” the group’s 2022 financial results, it said, and its assets in both markets “may be subject to non-cash impairment and write-down”.

As a result, Carlsberg said it was suspending its earnings guidance for 2022 due to the “very high uncertainty related to Ukraine and Russia and the possible indirect impact on the rest of the group”.