Carlsberg may deprive Baltika of rights to some global brands

The Baltika brewing company fears that the Carlsberg Group, which controlled this asset until the summer of 2023, will try to deprive it of the rights to some of the global brands, including Tuborg and Kronenbourg. The Russian company, trying to keep these brands most in demand among consumers in its portfolio, is trying through the court to prohibit the Danish holding from terminating the licensing agreement with it. After the Russian authorities transferred the Russian business of Carlsberg to the temporary management of the Federal Property Management Agency, the group promised to take “reciprocal steps.” But Kommersant was unable to find confirmation of the actions of the Danish side aimed at challenging the rights to Tuborg and Kronenbourg. Lawyers admit that Carlsberg will initiate such a process in the near future.

Carlsberg Breweries A/S may initiate legal proceedings in the Danish Maritime and Commercial Court to deprive Baltika of the rights to some of its global brands. This follows from the ruling of the Arbitration Court of St. Petersburg and the Leningrad Region dated September 25, 2023, where Baltika applied to prohibit Carlsberg from initiating a process in Denmark to terminate the framework license agreement. The company also asked the court to prohibit Rospatent from making changes to the contracts for the brands Tuborg, Kronenbourg, Seth & Riley’s Garage, Holsten and LAV, since the agreement established “the jurisdiction of disputes in Denmark and their termination will cause significant damage to the company.” The court refused to take interim measures.

Baltika, which was controlled by Carlsberg until the summer of 2023, manages eight factories in the Russian Federation, where more than 50 brands are produced, including Baltika, Don, Arsenalnoye, Zatecky Gus, etc. According to data from participants, Kommersant market, in 2022 the company produced 197.42 million decaliters of beer and beer drinks, which corresponds to second place in Russia after AB InBev Efes (223.29 million decaliters; brands “Old Miller from a Barrel”, Lowenbrau, Hoegaarden, Velkopopovicky Kozel, etc. .). In July, President Vladimir Putin signed a decree on the transfer of the Danish group’s shares in Baltika to the temporary management of the Federal Property Management Agency (see Kommersant of July 16). Its founder, Taimuraz Bolloev, was appointed president of Baltika. At the same time, Carlsberg stated that they would assess the consequences of transferring the Baltika business to the Federal Property Management Agency and take the necessary retaliatory steps. However, Kommersant was unable to find information in the Danish courts about possible claims by Carlsberg demanding the revoking of licenses from Baltika. The group itself told Kommersant on September 29 that it had not taken any legal action in this regard and could not yet comment on the topic in detail. Baltika did not provide a comment.

Kommersant’s interlocutor on the beer market considers Carlsberg’s possible attempts to deprive Baltika of global brands logical. Probably, Carlsberg really intends to file a corresponding claim in the Danish court, which served as the basis for Baltika to defend itself in a Russian court, says Konstantin Suvorov, partner at the law firm Kosenkov and Suvorov. According to him, some licenses, for example for Tuborg, expire on December 31, 2023 and will automatically terminate, while others continue to be valid. Perhaps, the lawyer suggests, termination of the framework agreement automatically entails the termination of all existing Baltika licenses for trademarks. According to Mr. Suvorov, if there is a ban by a Russian court on conducting proceedings in Denmark, the results of disputes in the court of this country on the termination of a framework license should not be recognized and enforced in Russia. Accordingly, Rospatent will not be able to accept Carlsberg’s applications for unilateral termination of licenses and make appropriate entries, the lawyer says.

Igor Khavsky, co-owner of the distributor SWAM Group and the Gletcher brewery, believes that the forced refusal to use some of Carlsberg’s global brands may affect Baltika’s sales, but the company has the opportunity to quickly select replacement brands. AB InBev Efes, Mr. Khavsky points out, replaced a number of brands, for example Leffe with Abbe, which is unlikely to have a significant impact on the company’s share. Nikolai Zhelagin, founder of the “Take a Day Off” chain of beer stores, notes that Leffe was a unique-tasting drink on the Russian market, so changing to a similar Abbe could have been painless. And Tuborg is a standard beer that consumers largely choose because of its popular brand, so replacement can be difficult, he says. The owner of the Kaufman brand agency, Stanislav Kaufman, notes that Baltika is obviously not ready to lose the rights to popular brands, but to resolve the situation it may have to create new local brands to replace them.

Anatoly Kostyrev; Konstantin Kurkin, St. Petersburg