Many world-famous companies left Russia after it invaded Ukraine. On Monday, the Danish brewer Carlsberg made an important announcement. The company made the decision to leave the Russian market and take a “substantial” non-cash impairment charge.
Danish brewer, the Western brewer most exposed to the local market, launched a strategic review of its Russian business this month. Nevertheless, Carlsberg kept its eight breweries in Russia operating. The company has 8,400 employees in Russia.
The decision to leave the local market would result in a significant non-cash impairment charge according to Carlsberg. It had non-current assets in Russia worth 19.2 billion Danish crowns by the end of last year, which amounts to around 15% of total assets or 44% of its total equity, based on the information taken from its annual report.
Its Russia business reported revenue of 6.5 billion Danish krone ($958 million) last year. Carlsberg reported an operating profit of 682 million krone ($100 million) in 2021.
Carlsberg and Heineken
Apart from Carlsberg it’s rival Heineken also decided to leave the local market. On Monday, Heineken also announced its decision.
The company already halted new investments and exports to Russia and had stopped the sale, production, and advertising of its Heineken brand beer in Russia.
Heineken said it was aiming to transfer the business to a new owner while complying with Russian and international laws.
The company said it will pay salaries to its 1,800 employees in Russia until the end of 2022. It expects to take a €400 million ($439 million) hit from the move.
Last month, Heineken reported that beer volumes grew by a few percentage points in 2021, driven by stronger demand for Heineken, Miller, and Dr Diesel premium brands. Heineken also reported growth for its market-leading cider business in the country.
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