Russian Government Takes Full Control Of Danone And Carlsberg

The Russian government has taken full control of the Russian subsidiary of the French yogurt maker known as Danone. The government has also taken control of a stake owned by Carlsberg in a local brewer.

Russia takes control of Danone and Carlsberg

The Russian government has previously warned about taking retaliatory action over the sanctions that have been imposed on the country by the West. One of these actions includes seizing the assets owned by Western companies in Russia.

Russian President Vladimir Putin signed a decree stating that the foreign-owned stakes in Danone Russia and Baltika Breweries were now under the temporary management of the Russian government. These companies were now being managed by the government property agency known as Rosimushchestvo.

The decree comes at a time when foreign-owned assets in Russia are being seized by the government. The Russian subsidiaries of Uniper in Germany and Fortum in Finland were taken under the control of the government in April.

At the time, the Kremlin warned that it would continue seizing more Western assets in Russia. The Russian government attributed the decision to the foreign moves that were made against Russian companies in Western countries. The West has imposed many sanctions against Russia following the invasion of Ukraine early last year.

Carlsberg released a statement saying that the company had not obtained any official communication from the Russian government related to this presidential decree. Moreover, the company noted that it was not aware of the consequences that this move would have on Baltika Breweries.

The company also said that the possibility of the full disposal of its Russian business was uncertain. In June, Carlsberg secured an agreement deal to sell its Russian operation in accordance with the regulatory guidelines.

On the other hand, Danone has said that it was investigating the asset seizure. The French yogurt maker said that the decision made by the Kremlin would not have any effect on its financial guidance during the year. In October last year, Danone said it was looking for a buyer for its dairy food operations in Russia.

Russian government retaliates against the West

In April this year, the Russian government said that it could seize more assets owned by Western countries in a retaliatory move. At the time, the Kremlin was reacting angrily to the reports made about the Group of Seven nations considering a near-total ban on exports to Russia.

Many Western countries have continued advocating for tougher sanctions against Russia to hamper its invasion of Ukraine. A spokesperson from the Kremlin had said that the decision did not deprive the owners of their assets as external management was only temporary. Instead, it meant that the original owner no longer had the right to participate in management decisions.

Given these latest developments, more seizures of Western companies operating in Russia could be seen. On the other hand, the Russian-owned assets in Western countries could also be under threat.