stolen work
A Danish brewer, Carlsberg, has cut all ties with its operations in Russia and will not engage in any agreement with Russian authorities that would legitimize the transfer of assets to the interim management of the Federal Property Management Agency, according to the company’s chief executive officer, Jacob Arup-Andersen.
“We cannot ignore the fact that they seized our business in Russia, and we will not help them legitimize it,” Arup-Andersen stated at the quarterly results presentation, as reported by Reuters.
He noted that the Russian beer company Baltika will lose the right to sell products under Carlsberg brands once licensing agreements expire, effective from April 1, 2024.
The company’s quarterly report indicated that Carlsberg would continue to take steps to protect its assets, employees, and operations. Investments tied to Baltika were no longer considered a capital investment and were reclassified as receivables from the Russian government, ultimately written off. The total write-down reached 7 billion kroner, roughly 1 billion US dollars, as stated in the report.
Transfer of an asset
The decree transferring Carlsberg’s stake in Baltika to the interim management of the Federal Property Management Agency was signed by President Vladimir Putin on July 16, 2023. The move followed a broader decree from April 25, 2023, authorizing temporary management of property belonging to individuals and entities from what Moscow labels enemy countries, in cases where assets are confiscated in Russia or by Russian parties abroad. The decree covers movable and immovable property of foreign entities on Russian soil, including securities and shares in Russian companies.
Nearly a month before the Baltika stake transfer, Carlsberg announced it had identified a potential buyer for its Russian business. The company did not disclose the buyer’s name or the sale terms at that time, and the agreement never came to fruition. Former Carlsberg CEO Kees t’Hart later remarked in August that Putin’s decision to transfer assets in Russia had stunned the company’s management.
In early October, Carlsberg terminated licensing agreements with Baltika for the use of international and regional brands in response to the asset transfer. The affected trademarks included Tuborg, Kronenbourg, Seth & Riley’s Garage, Holsten, and LAV.
On October 20, Baltika petitioned the arbitration court for interim measures to block Rospatent from registering the termination of trademark usage rights. The court granted Baltika’s request.
Russian assets
The Kremlin’s actions to dispose of foreign company assets are seen by Moscow as a response to Western measures affecting Russian securities. The European Union is reportedly crafting mechanisms to use profits from frozen Russian assets to support Ukraine, a plan discussed by top EU officials, including Josep Borrell. Russian authorities have also signaled a desire for proportional responses should Western states benefit from Russia’s frozen funds.
State Duma Speaker Vyacheslav Volodin argued that theft of frozen Russian assets by Western nations would demand a symmetric response from Moscow, criticizing European leaders who he said were trying to preserve their positions. He claimed that their discussions about redistributing frozen funds to sustain militarization in Kiev were unacceptable and urged a balanced reaction from Russia.
According to reports from the Financial Times dated October 31, Russian authorities have intensified controls limiting how Western companies can profit from asset sales denominated in foreign currencies. Transactions with foreign firms may now be postponed or partially blocked as part of these measures. Kremlin spokesperson Dmitry Peskov later announced a mechanism for foreign companies to exit the Russian market under government-determined conditions, stating that there can be no free exit anymore.