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

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Carlsberg expects ‘challenging 2023’ following Russia exit

Danish brewer Carlsberg warned Tuesday that 2023 would be another "challenging year" as it reported increased revenues but swung to a net loss owing to its exit from Russia.

Carlsberg expects 'challenging 2023' following Russia exit

“The development of the war in Ukraine and the impact on our business remain highly uncertain, as is the Covid-19 recovery in China, including consumer off-take during the Chinese New Year celebrations,” the company said in its earnings report.

Revenue for the global beer maker came in at 70.26 billion Danish kroner ($10.1 billion) for 2022, up 16.9 percent from the year before.

The revenue growth was just short of analysts expectations, who had pencilled in 70.43 billion kroner according to a Bloomberg survey and 70.44 billion kroner according to one by Factset.

Carlsberg reported a net loss of 1.06 billion kroner for the year, which was impacted by writedowns of 10.74 billion kroner.

The company earned a net profit of 6.85 billion kroner in 2021.

Russia accounted for nine percent of Carlsberg’s profits in 2021, but the group decided to sell its operations there, joining an exodus of foreign businesses following Moscow’s invasion of Ukraine and Western sanctions against the country.

Meanwhile the company reported an adjusted net profit of 9.69 billion kroner, beating analyst expectations which were 7.73 billion kroner or 7.65 billion kroner, according surveys by Bloomberg and Factset respectively.

The company also warned that rough seas were ahead and said that “2023 will be another challenging year.”

“Due to our and our suppliers’ rolling hedging, last year’s commodity and energy price increases will have a significant impact on our 2023 cost of sales and logistics costs,” Carlsberg said.

The Danish brewery employs around 40,000 people globally and 1,500 in Denmark, according to its website.