In response to Russia's presidential decree transferring temporary management of Baltika Breweries to Russian authorities (inside.beer, 16.7.2023) Carlsberg Breweries A/S has communicated to Baltika that it is terminating the license agreements. These agreements granted Baltika the authority to produce, market, and sell all Carlsberg Group products, including international brands like Tuborg, Kronenbourg 1664, Holsten, Sommersby Cider but also regional brands.
During a limited run-off period extending until April 1, 2024, Baltika will be allowed to utilize existing stock and materials.
Baltika recently submitted an application to the St. Petersburg Arbitration Court, requesting a prohibition on Carlsberg from instigating legal proceedings against the company in a Danish court for the termination of the license agreement. This information is based on records from the Russian courts database. A hearing has been scheduled for February 2024.
On the same day, September 14, Baltika also petitioned the court to prevent the Russian patent authority, Rospatent, from making any alterations to its trademarks related to Tuborg, Kronenbourg, Seth & Riley’s Garage, Holsten, and LAV, the Financial Times reported.
Carlsberg has stated that it currently does not see a viable path to a negotiated solution for exiting Russia. The Danish brewing group made it clear in a statement that it refuses to be pressured into an agreement under unacceptable terms, citing the illegitimate takeover of their business in Russia.
Additionally, Carlsberg is taking all available actions, including legal measures, to safeguard its employees, assets, and operations.
Before Baltika was seized, Carlsberg was close to finalizing a sale. In June, the Danish brewing group announced to have signed an agreement to sell its Russian business without disclosing the buyer. (inside.beer, 23.6.2023)
The next steps regarding Baltika remain uncertain. The Carlsberg Group still holds ownership of the shares in the company, even as temporary management is transferred to the Russian state. The course of action that the Russian state will pursue in these circumstances remains unclear.
Consequently, Carlsberg will record a full impairment of the value of its business in Russia. This impairment will be reflected in other comprehensive income in the full-year financial statements and will not affect the income statement.
