Carlsberg’s reluctance to withdraw their support of Russia has backfired on their own company. Reports from November 2023 reveal that the Russian government detained the CEO of Carlsberg’s Russian business as well as the company’s vice president. The Russian authorities arrested Denis Sherstennikov and Anton Rogachevsky based on allegations of fraudulent retention of Baltika Breweries’ intellectual properties. Convictions of fraud in Russia can carry a sentence of up to ten years in prison. The Danish company was in the process of selling off its Russian operations when the authorities seized the business. President Putin signed the directive to seize the business as part of regime’s actions against ‘unfriendly’ countries.
In October 2023, Carlsberg announced that they had terminated their license agreements to produce, market, and sell their products in Russia. The company had also announced that there would be a run-off period until April 01, 2024. According to the Danish alcohol maker’s website, Baltika employed 8,400 employees across eight plants. The beer giant owns brands such as Kronenbourg 1664, Tuborg, Brooklyn and Somersby cider.
Big Alcohol slow to exit Russia
Movendi International has reported on the alcohol industry’s failure to adequately respond to Russia’s attack on Ukraine. Multiple reports revealed Big Alcohol’s tendency to drag its feet in withdrawing their support from Russia after the regime launched the war on Ukraine.
Multinational corporations from all over the world – with the exception of alcohol industry giants – started cutting ties with Russia immediately due to two main reasons:
- Companies with Russian state ties began leaving because their profits contributed to Russia’s assault on Ukraine.
- Other companies are leaving Russia to create political pressure to end the war.
Major multinational companies leaving Russia is important for several reasons. The exodus not only targets the Russian economy, thus undermining Putin’s war machine. It also sends a strong message to the Kremlin that what it is doing is unacceptable. Meanwhile, the U.S. and European countries have together implemented comprehensive sanctions packages cutting out Russia from the world economy.
Some companies did not leave Russia willingly but were compelled to by the threat of popular support for global boycotts. This includes unhealthy food and drinks companies McDonald’s, Coca Cola and Pepsi. For days the hashtags #BoycottCocaCola and #BoycottMcDonalds were trending on Twitter. In the end, the corporate giants yielded to the pressure and shut down operations in Russia, at least for now.
Big Alcohol has for a long time gone fairly under the radar from such public pressure to exit Russia – except for alcohol giant Pernod Ricard that came under scrutiny in Sweden for their continued ties to Russia.
Carlsberg in particular was slow to respond and chose not to suspend their operations in Russia.
For some of these alcohol giants, the Russian alcohol market was important for profit maximization. And so, while they publicly announced withdrawal plans, investigative journalists revealed Big Alcohol kept investing in Russian and maintained business operations even as the war progressed.
Carlsberg’s trademark alcohol products taken over by Baltika Breweries
Carlsberg’s reluctance to withdraw their support of Russia has backfired. According to media reports, fraudulent activities during the Russian government takeover of the business has led to the arrest of the CEO and Vice President of Carlsberg’s Russian operations. Denis Sherstennikov and Anton Rogachevsky were arrested over allegations of fraudulent retention of Baltika Breweries’ intellectual properties. The Danish company was in the process of selling off its Russian operations when the authorities seized the business.
According to court filings in St. Petersburg, Baltika is taking legal steps to prevent Carlsberg from making changes to the trademarks in question. According to reports, the two men acquired intellectual property rights for the companies Carlsberg Kazakhasntan and Vista BWay Co.
These companies, which belonged to Baltika, had allegedly been acquired through deception. According to the company, the allegations are a baseless attempt to justify the government’s illegal takeover of the business. Investigators state that the acquired assets are worth more than 295 million rubles. These property rights allegedly allowed Baltika to supply their products to Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Mongolia, and Belarus.
Now that the Kremlin’s oppressive actions are affecting the business, Carlsberg has been vocal in their condemnation of the government’s unethical practices.
Carlsberg’s history of silence in the face of oppression and human rights violations
Early in 2023, Movendi International reported on the manner in which Carlsberg participated in the oppression of the Muslim minority in China.
Carlsberg dominates 85% of the beer market in Xinjiang. However, Xinjiang is also home to a Muslim minority, the Uyghurs.
The Xinjiang authorities force the Uyghurs to consume alcohol or face imprisonment for practicing their way of life.
Experts criticize, among other issues, that Carlsberg is helping to sponsor a beer festival in the province where most people adhere to religions that promote a life free from alcohol and other drugs. So, in Xinjiang alcohol is used as a marker to assess whether people are “radical fundamentalists” or not.
Rune Steenberg, a leading Uyghur researcher, highlights the role of alcohol as an active tool of oppression in the region.
Carlsberg has made itself a tool for the Chinese government in their repression in Xinjiang… alcohol has undoubtedly been an active tool in the oppression of the Uyghurs. Especially in creating a situation where you have not been able to remain Uyghur in any strong sense without being labeled as an Islamist or a radical fundamentalist.”
Rune Steenberg, one of Europe’s leading Uyghur researchers
Other alcohol giants have also been exposed for unethical corporate practices that put profit maximization over fundamental human rights. Alcohol companies are using predatory practices to maximize profits.
The alcohol industry’s silence in the face of crimes against humanity
In Myanmar, the beer giant Kirin held very close relations with the military junta, even during ethnic cleansing campaigns against the Muslim minority.
In Nigeria, investigative journalism exposed that Heineken used poor prostituted young women to increase beer sales in bars in cities such as Lagos. Heineken is said to have known about problems with sexual abuse but did not act to stop the exploitation of their so called beer promotion girls.
The alcohol industry completely ignores the fact that the products they sell deeply harm people and communities.”
Filip Nyman, President, UNF
Sources
BBC News: “Russian Carlsberg staff arrested after business seized“
Dagens.com: “Carlsberg’s executives arrested amid fraud charges post-Kremlin takeover“
euronews.business: “Why executives from Carlsberg’s Russian brewery are facing 10 years in prison“
