Brewer Carlsberg pulls out of Russia over Ukraine war
Mar 28, 2022, 6:59 AM | Updated: 9:41 am
COPENHAGEN, Denmark (AP) — Danish brewery group Carlsberg said Monday it is pulling out of Russia, hours after its competitor, Dutch brewing giant Heineken, did the same, citing Moscow’s ongoing war against Ukraine.
In a statement, the Copenhagen-based group said it had taken “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.”
Carlsberg fully owns Baltika Breweries, one of the largest brewing concerns in Russia and the biggest exporter of Russian beer. The Danish brewer generates around 10% of its sales in Russia, where has about 8,400 staff who will be laid off.
The Danish brewer’s CEO, Cees ‘t Hart, said the decision means Carlsberg “will have no presence in Russia,” and the business in its vast Russian market will no longer be included in Carlsberg’s revenue and operating profit. The business “will be treated as an asset held for sale until completion of the disposal.”
In 2021, Carlsberg reported revenue in Russia of 6.5 billion kroner ($959 million) and operating profit in Russia of 682 million kroner ($101 million) respectively. The group said it will provide further details on the accounting impact of the planned disposal and the reintroduction of earnings guidance later.
Any profits generated during the humanitarian crisis will be donated to relief organizations, Carlsberg said.
In the Netherlands, Heineken said that its business in Russia “is no longer sustainable nor viable in the current environment. As a result, we have decided to leave Russia.”
It said it is seeking an “orderly transfer of our business to a new owner in full compliance with international and local laws.”
Heineken will continue to pay its 1,800 staff in Russia through the end of the year. The company says it will not profit from the sale of its Russian operations and expects to take a 400 million-euro ($438 million) charge as a result.
Earlier this month, Carlsberg said it was immediately stopping new investments and exports to Russia with ‘t Hart saying then that the stop also includes exports from other Carlsberg Group companies to Baltika Breweries.
Russia and Ukraine are the two main markets for Carlsberg in central and eastern Europe.
Baltika Breweries was established in the Russian city of St. Petersburg in 1990 and is the leading exporter of Russian beer, with the company’s products offered in more than 75 countries, including Western Europe, North America and the Asian Pacific region.
___
Follow all AP stories on Russia’s war on Ukraine at https://apnews.com/hub/russia-ukraine.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
