2023-07-16 22:16:04
The Russian state has taken control of assets in Russia of French giants Danone and Danish Carlsberg, which had announced their intention to leave the Russian market following the offensive in Ukraine, said a decree published on Sunday.
According to this decree signed by Vladimir Putin and published on the official Russian legal portal, 98.56% of the shares of the Russian brewery Baltika, belonging to Carlsberg, and tens of thousands of shares belonging to a Russian subsidiary of Danone are placed temporarily” under the control of the Russian state.
In detail, this decree specifies that 83,292,493,000 shares of “Danone Russia”, owned by the “Produits Laitiers Frais Est Europe” group, still according to the decree, are placed under the control of the Russian State, as well as 85,000 other shares belonging to the “Danone Trade” group.
From a source familiar with the matter, Moscow’s announcement surprised the company, while negotiations for a transfer seemed close to success. It came days following French President Emmanuel Macron gave the go-ahead for the delivery of long-range SCALP missiles to Ukraine, which the Kremlin called a “decision tainted with error”. Danone indicated on Sunday evening that it had “taken note of the decree of the Russian authorities which aims to place Danone Russia under temporary external administration” and “is currently studying the situation”.
A costly withdrawal for Danone
In mid-October, Danone had announced its intention to withdraw from most of its activities in Russia. The French agri-food giant, which had initially assumed its presence in Russia to meet “the essential food needs of civilian populations”, had said it planned to cede control of its “dairy and vegetable products” branch, not retaining than infant nutrition.
The transfer of control process “was progressing in accordance with the planned schedule”, according to Danone which, in a press release, also affirmed that it was preparing “to take all the necessary measures to protect its rights as a shareholder of Danone Russia, and to ensure the continuity of the company’s operations in the interest of all stakeholders, and in particular its employees”.
The French group had specified that this withdrawal operation might “lead to a depreciation of up to 1 billion euros” in its accounts. Danone markets milk and yoghurts in Russia under the Danone, Danissimo or Prostokvashino brands. In 2010, the group had bought 57.5% of the number two Russian dairy products, Unimilk (21% market share and 25 factories). But on Sunday, he assured that the Russian decision announced earlier will have “no impact on Danone’s financial objectives for the year 2023”.
Since the attack on Ukraine by Russia on February 24, 2022 and the first economic sanctions decreed by the West, many multinationals have left Russia, others have suspended their activities there, in the oil, automobile or even luxury.
Carlsberg had 8,400 employees in Russia
At the end of June, the Danish brewer Carlsberg announced that it had found a buyer, without naming him, for its activities in Russia, more than a year following announcing its withdrawal from the country following the Russian offensive in Ukraine.
The group announced at the end of March 2022 the sale of its important activities in Russia, where it has 8,400 employees and has owned the Russian brand Baltika since 2000.
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