Yahoo Finance Carlsberg hit by £4.7bn loss after Putin seizes Russian business
Carlsberg has plunged to a £4.7bn loss after the Kremlin commandeered its Russian business.
Carlsberg’s Russian business unit, Baltika Breweries, was seized by Russian authorities last year after the Danish brewer tried to sell it and exit the country.
The brewer said on Tuesday that the incident resulted in the company making a loss of 40.8bn Danish krone (£4.7bn) for the year.
Carlsberg employed around 8,400 people in Russia prior to the seizure, and had been looking to sell the business amid pressure on consumer brands to leave Russia following its invasion of Ukraine.
Its former chief executive, Cees ‘t Hart, said at the time it had been given “no indication” why the Russian state had taken over.
The current chief Jacob Aarup-Andersen previously accused Russia of having “stolen” the business.
He said on Wednesday: “We are, of course, taking all legal and business steps that we can do in terms of protecting our business, protecting our people and our assets.”
The seizure of Carlsberg’s Russian business comes amid a clampdown on Western-owned assets in Russia by Vladimir Putin. It is in response to economic sanctions handed down by Western powers.
The Russian subsidiary of French yoghurt maker Danone was also seized in the wake of Mr Putin signing a decree that gave authorities fresh powers to take over Western businesses.
Mr Aarup-Andersen warned that Carlsberg would have to raise its prices in 2024, despite the rate of inflation easing.
“We’re not seeing any let-off in terms of the overall cost picture of the business,” he said. “There are categories where prices have come down. If you look at commodities, aluminium and barley has come down but at the same time, sugar, glass, etc are up.”
He added: “We will need to cover that by our revenue per hectolitre going up… and pricing is, of course, an element of that.”
Mr Aarup-Andersen, who took over as chief executive at Carlsberg last autumn, blamed consumer sentiment and bad weather for a fall in volumes of its beer across Europe, although organic sales across the world rose 9.2pc.