The Kremlin places the Russian business of the French food company Danone and the Danish brewery Carlsberg under state administration. President Putin signed a decree on the “temporary” takeover of shares.
By presidential decree, Russia has taken control of the shares of the Danish brewery Carlsberg and the French food group Danone in their Russian subsidiaries. A decree by President Vladimir Putin published on the official justice portal states that the Russian state will “temporarily” manage the shares of Danone Russia and the Carlsberg subsidiary Baltika.
Both companies were presented with a fait accompli despite having announced their intention to exit the Russian market after the war against Ukraine.
Danone plans withdrawal from Russia
Danone said it is currently assessing the situation and preparing to “take all necessary measures to protect its rights as a shareholder of Danone Russia and the continued existence of the business in the interests of all stakeholders, especially its employees.”
After the Russian attack on Ukraine, Danone was one of the few international companies to remain present in Russia. At the end of October, the group finally announced that it was ending most of its activities in Russia. The company will exit its dairy and plant-based products business and only maintain its infant formula business.
The step could lead to write-downs of one billion euros, it was said at the time. On Sunday, Danone said the Russian decision will have “no impact on Danone’s financial targets” for 2023.
Carlsbergsubsidiary still active
The Carlsberg subsidiary Baltika is a leading brewing company in Russia with a market share of around 30 percent. Carlsberg announced in June that it had found a buyer for its activities in Russia, without naming a name. “Following the Presidential Decree, the prospects for this sale process are now extremely uncertain,” the Carlsberg company said. The Danish brewery group was not informed by the Russian authorities about the presidential decree.
At the end of March 2022, the Carlsberg Group announced that it would stop production and sales in Russia. However, the subsidiary Baltika should continue to operate as an independent company in order to support the 8400 employees in Russia.
In a step similar to the decree now signed by Putin, Russia placed the national companies of the energy companies Uniper from Germany and Fortum from Finland under state control in April. Since Russia attacked Ukraine, numerous Western corporations have withdrawn from Russia.