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Russia seizes control of Carlsberg subsidiary

The Russian state has announced it has seized control of shares in the local Carlsberg-owned brewery as well as Danone’s operations.

The state said that it had taken control of both Baltika Breweries, which brews Carlsberg, in response to the action of foreign states towards Russian companies following the invasion of Ukraine in February 2022.

According to the fresh Putin-backed presidential decree, it said that foreign-owned stakes in Danone Russia and Baltika Breweries were being put under the temporary management of the Russian government property agency Rosimushchestvo.

In a statement, Carlsberg said it had not received any “official information from the Russian authorities regarding the presidential decree or the consequences for Baltika Breweries”.

The news follows Carlsberg’s announcement last month that it planned to sell its Russian business, and that it had signed an agreement to sell it, subject to regulatory approval.

Following the Russian invasion of Ukraine in late February 2022, Carlsberg, like many drinks companies, pledged to exit Russia. Despite an initial aim to be out of the country by the end of last year, the process of separating operations in Russia from the rest of its business has proven to be a challenge.

A press release from the company noted at the time of the sale’s announcement that 150 work streams and DKK150 million (£17.3m) in brewery equipment investments had to be considered.

Group CEO Cees ’t Hart said in June: “The signing of an agreement to sell the Russian business is a very important milestone in the highly complex separation and selling process. While it has been an extensive process, it has been important for us to reach the best possible solution for all stakeholders, including our more than 8,000 employees in Russia. We now look forward to receiving the necessary regulatory approvals.”

The brewery has now announced that following the presidential decree, “the prospects for this sales process are now highly uncertain.”

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