Carlsberg finally exits Russia after tough negotiations

In March 2022, following Russia's invasion of Ukraine, Carlsberg announced its intention to exit the Russian market, where it employed around 8,400 staff. The Danish brewing giant encountered significant challenges with legal and political barriers that complicated its exit strategy. A year later, President Vladimir Putin placed Carlsberg's local unit, Baltika Breweries, under state management, leading Carlsberg's CEO, Jacob Aarup-Andersen, to state that the company’s Russian business had effectively been 'stolen' from them. After enduring a lengthy negotiation period and with Putin's intervention ending the state control over Baltika, Carlsberg finally reached an agreement to divest its shares in the local brewery for an undisclosed amount of cash. As part of this transaction, Carlsberg will also acquire Baltika's stakes in its ventures in Azerbaijan and Kazakhstan. The company emphasized that the new ownership structure would involve two long-serving employees from Baltika, who currently hold prominent positions within the company. Aarup-Andersen expressed relief at this resolution, noting that the deal would help settle various ongoing lawsuits and issues around intellectual property rights. The CEO stated that they had 'exhausted all options' to exit Russia while safeguarding their employees and assets, conveying the complexity of navigating business operations in a politically charged environment. Ultimately, Carlsberg's decision to sell concludes a challenging chapter in its Russian operations, as the company sought a balanced approach to mitigate losses while addressing its responsibilities towards its employees and stakeholders. The agreement signifies an important step forward for Carlsberg, allowing it to disengage from a tumultuous market while focusing on its broader business strategy in less contentious regions.