Carlsberg terminated licensing agreements with Baltika

Danish holding Carlsberg Group reported, which notified Baltika of the termination of licensing agreements for the production and sale of products under the group’s international and regional brands. The decision was a response to the transfer of Carlsberg’s share in the brewing company to the temporary management of the Russian state.

“We have informed Baltika of the termination of the licensing agreements that allow Baltika to produce, market and sell all Carlsberg Group products, including international and regional brands. This is a response to the presidential decree of July 16, 2023 on the temporary transfer of management of Baltika to the Russian authorities,” the statement says.

Until April 1, 2024, there will be a limited period of operation, during which Baltika can use up existing reserves and materials, Carlsberg added.

“It is unclear what formally the next steps will be in relation to Baltika. As the Carlsberg Group, we retain ownership of the company’s shares while temporary management is transferred to the Russian state,” Carlsberg noted.

The concern also said that now they do not see any possibility of a negotiated solution to exit the Russian market.

In mid-July, Russian President Vladimir Putin signed a decree on the transfer of shares belonging to Carlsberg Group structures to temporary state management. On July 18, it became known that Taimuraz Bolloev, who led the company from 1991 to 2004, was appointed president of Baltika. After that, he joined the Carlsberg Group reportedthat the change of management at the Russian enterprise occurred without the knowledge or approval of the holding.

Later it became known that Baltika appealed to the Arbitration Court of St. Petersburg and the Leningrad Region with a request to prohibit Rospatent from making changes to contracts for the brands Tuborg, Kronenbourg, Seth & Riley’s Garage, Holsten and LAV. In addition, the company asked to prohibit Carlsberg from initiating proceedings in Denmark to terminate the framework licensing agreement.

Carlsberg Group in March 2022 announced its intentions to leave the Russian market. In June 2023, the company announced that it had signed an agreement to sell the Russian business. However, the name of the buyer was not disclosed at that time. Carlsberg clarified that the timing of completion of the transaction “remains uncertain”, as it must go through the approval process from Russian government and regulatory authorities in a number of jurisdictions.

Baltika was founded in 1990. The company produces beer under the brands Baltika, Zhigulevskoye, Tuborg, Zatecky Gus, Kronenbourg 1664, S&R’s Garage and others. At the end of 2022, the company’s revenue increased by 21.96% to 101 billion rubles, net profit for this period amounted to 10 billion rubles.