Russian Carlsberg staff arrested after business seized

November 16, 2023  –The boss of Carlsberg’s Russian business and a top manager have been arrested after the Kremlin took control of the beer company in the country.

Denis Sherstennikov and Anton Rogachevsky, bosses at Carlsberg’s Russian subsidiary Baltika Breweries, were detained on Wednesday.

It comes after Carlsberg terminated its business in Russia last month due to the state taking over Baltika in July.

The pair are accused of fraud, but Carlsberg branded the allegations fake.

“It is appalling that the efforts of the Russian state to justify their illegal takeover of our business in Russia has now evolved into targeting innocent employees,” the company said in a statement.

It added the safety of its employees, including those in Russia, “has always been our main priority” and said it would “do what we can to help the employees under these difficult circumstances”.

Last month, the boss of Carlsberg, Jacob Aarup-Andersen, said the Kremlin had “stolen our business in Russia”.

The Danish brewer was in the process of selling Baltika Breweries as it looked to leave the Russian market, before the government seized control of the company.

Following the arrests, Carlsberg said: “Up until the introduction of external management by the Russian state, Baltika has acted in accordance with the law and the policies guiding all companies in the Carlsberg Group.”

The BBC understands that investigators alleged that Mr Sherstennikov and Mr Rogachevsky acquired intellectual property rights for the companies Carlsberg Kazakhstan and Vista BWay Co, which previously belonged to Baltika, “through deception”.

According to their LinkedIn profiles, Mr Sherstennikov is Baltika Breweries’ chief executive and previously worked for the Carlsberg Group for eight years. Mr Rogachevsky’s profile says he is the vice president legal.

Investigators in St Petersburg claim the rights, which are estimated to be worth more than 295 million roubles (£2.65m), enabled Baltika to supply its products to Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Mongolia and Belarus.

Baltika produces some of the most recognisable beer brands in Russia, with 8,400 employees across eight plants, according to Carlsberg’s website.

Brands owned by the group include Kronenbourg 1664, Tuborg, Brooklyn and Somersby cider.

But since the invasion of Ukraine in February last year, many Western companies have come under pressure to leave Russia and shut down operations.

As Carlsberg looked to sell its Russian business, the Kremlin took control of Baltika in July under an order signed by President Vladimir Putin. Moscow introduced rules earlier this year allowing it to seize the assets of firms from “unfriendly” countries.

Carlsberg announced in October that it had informed Baltika that it had terminated all of its licence agreements to produce, market and sell its products in the country, but added there would be a run-off period until 1 April 2024 while existing stock is used up.

However, the BBC understands Baltika appealed to the arbitration court with a request to prohibit Carlsberg from terminating the licensing agreement.

Mr Aarup-Andersen previously said the company refused to enter into a deal with the Russian government that “somehow justifies them taking over our business illegally”.

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