Beer giant terminates license agreements in Russia

Carlsberg Group announced on Tuesday the termination of licensing agreements with its former Russian unit, Baltika Breweries, for the production and sale of the group’s products, including international and local brands.

According to a statement on its website, the move was in response to the Russian government’s temporary transfer of the company’s business to the Federal Property Management Agency. The Danish brewer said at the time that it was shocked by the decision and promised to take “reciprocal steps.” 

There will be a limited run-off period stretching to April 1, 2024, in which Carlsberg’s existing stock and materials can be used up by Baltika, the statement reads.

“We have now concluded that we currently see no path to a negotiated solution for exiting Russia. We refuse to be forced into a deal on unacceptable terms, justifying the illegitimate takeover of our business in Russia,” the company stated.

On Monday, media outlets reported, citing relevant documents, that Baltika Breweries filed a lawsuit against Carlsberg in an attempt to preserve the licensing rights for the use of certain brands in the Russian market. It also reportedly asked the court to stop Carlsberg from initiating a process in Denmark to terminate the framework license agreement, explaining this was necessary due to potential significant losses the company would suffer as a result.

Carlsberg operated eight production facilities in Russia before announcing its exit from the country in March 2022 amid Western sanctions on Moscow.

Last year, the group took a $1.5 billion write-down on its Russian Baltika subsidiary. Under a Russian presidential decree, the Danish brewer retained ownership of the unit but no longer had any control or influence over it.

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