Ben Hamilton
March 29th, 2022

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Planning a swift getaway from Russia (photo: Carlsberg)

Pressure is mounting on all Danish businesses with Russian interests following Carlsberg’s decision to completely pull out of the country in the wake of the Ukraine invasion and put all of its assets up for sale.

Most analysts concur that Carlsberg will be lucky to recoup even a fraction of the 20 billion kroner value of its assets in Russia, and other businesses will be nervous that an exit could leave huge holes in their balance sheets.

But it might be small beer compared to the cost of staying put, with the public now increasingly questioning their decision to stay. DR reports there are 19 major Danish companies with noteworthy interests in Russia. 

Sydbank analyst Per Fogh is not holding his breath about Carlsberg’s chances of a lucrative sale. “I do not really expect them to get anything special. I almost expect them to write off the entire value of it,” he told DR. 

Putin regime could be left with considerable scraps
Anders Schelde, the investment director at the pension fund Akademikerpension, told DR that Carlsberg’s exit (notably on the same day as Dutch rival Heineken), which was confirmed yesterday afternoon via a press release, will undoubtedly put massive pressure on other companies to follow suit.

“I would say that it increases the pressure on all Danish companies with activities in Russia. But every single situation is unique,” he said. “One must be very aware that it is also about withdrawing from Russia in a way that leaves as little money as possible on the table for the Putin regime.”

Fogh agrees. “So now that they are taking the consequence and pulling the plug, there is no doubt that greater pressure will be put on the other Danish companies that still have activity in Russia,” he said.

With 8,400 employees at eight breweries in the country, it is estimated that Carlsberg has invested 10 billion kroner in the country in recent years. The most valuable asset is a local brand, Baltika, which accounts for 90 percent of its Russian interests. 

Carlsberg reported a turnover of 6.5 billion kroner for its operations in Russia in 2021, which yielded an operating profit of 682 million kroner.

Rockwool and Ecco will stay for now
Two major companies, Rockwool and Ecco, have so far resisted the pressure to close down shop in Russia. 

Rockwool argues that closing down will be the equivalent of handing over funds to the Russian state’s war chest.

“We condemn the war, and the decision to keep our factories in Russia running has not been easy. But if we close our business, the Russian state will take over. And the business will run on, just with new owners. And thus we will give the Russian state a billion kroner gift in the form of good business,” it reasoned to DR.

Likewise, Ecco will remain. “Conversely, as a company, we have spent time thoroughly considering and analysing what we need. After long discussions, this has led us to continue operating in Russia at present. We will not leave our more than 1,800 employees and their families in the lurch,” reasoned Ecco chief executive Panos Mytaros told Finans on March 23.