Court permits Baltika to use Carlsberg beer brands

ST. PETERSBURG. Dec 18 (Interfax) - The St. Petersburg and Leningrad Region Arbitration Court has upheld a suit filed by Baltika Brewing Company LLC against Carlsberg and invalidated the latter's unilateral waivers of licenses to produce and sell several brands of beer.

"The claim is satisfied in full," according to arbitration case file.

The full text of the operative part of the judgment has not yet been published.

Carlsberg said in October that it had terminated the license agreements with Baltika for producing, marketing and selling all of the group's products in Russia, including international and regional brands in response to a presidential decree. Baltika would be able to sell and use already existing stock and materials until April 1, 2024, Carlsberg said. Baltika went to court over this.

The court on October ordered an interim measure, which prohibited Rospatent from the state registration of terminated licenses to use trademarks of the Holsten, Kronenbourg, Tuborg, Seth & Riley's and Garage brands. The court said the interim measure "aims to protect production and preserve property (property rights)", as well as "maintain the existing state of relations (status quo) between the parties and contractual obligations between the parties in the form and for the period agreed upon by the parties when concluding licensing agreements." Carlsberg then filed a complaint with the Thirteenth Arbitration Court of Appeal against the decision of the court of first instance to take interim measures in the case with the Baltika Brewing Company. The hearing will take place on January 16, 2024.

Carlsberg Group announced plans to leave Russia in March 2022. It said in late June 2023 that it had signed an agreement to sell its Russian business, without naming either Baltika's future owner or the transaction parameters. The sale failed, and Russian President Vladimir Putin signed an order on July 16, under which 100% of Baltika - 98.56% of which belonged to the Swedish legal entity Carlsberg, 0.09% to the German legal entity Carlsberg and 1.35% to LLC Hoppy Union - were placed under the management of the Federal Property Management Agency.

Carlsberg said at the time that the decree made the prospect of selling Baltika extremely uncertain and at the end of October, commenting on the group's quarterly results, the company condemned what it said was the "illegitimate takeover of our business in Russia" and said it was taking action to protect its assets, the impairment of which it estimated at almost $1 billion.

Baltika, the second largest brewing company in Russia, operates eight breweries. The company's revenue in 2022 rose to 100.7 billion rubles from 82.6 billion rubles in 2021, while its net income increased 90% to 9.952 billion rubles. Baltika's production fell 4.7% to 197.42 million decaliters in 2022.