Page 66 - RusRPTNov23

our own database of foreign companies’ Russian revenues reported to the tax authorities, which sum to about $170bn in 2021, falling to $130bn in 2022. This figure likely includes VAT at around 20%, and double counting from sales between companies such as the provision of business services by foreign companies to other foreign companies so is probably overstated. In any case, foreign businesses’ revenues are well below 10% of Russian GDP.
Finland's elevator producer Kone has completed the sale of its Russian business and has left the country, the company said in a statement on October 24. "Kone Corporation, a global leader in the elevator and escalator industry, has completed the sale of its Russia operations to Russia-based S8 Capital diversified Holding,” the company said. “The transaction has been approved by the relevant authorities and the closing of the deal means that Kone is now fully divested from Russia. The value of the transaction is not disclosed."
Western companies in Russia were thrown into confusion by the July nationalisation of the Russian assets of French dairy producer Danone and the Baltika brewery owned by Denmark's Carlsberg.
But they have gradually come to terms with the developments, and Carlsberg in mid October wrote down the entire value of its Russian business. Admittedly, the Russian government continues to make it harder for Western companies to exit the Russian market — but no full-scale nationalisation drive has followed the seizure of Carlsberg and Danone. Three months on, they’re the exception rather than the rule.
“We have now concluded that we currently see no path to a negotiated solution for exiting Russia. We refuse to be forced into a deal on unacceptable terms, justifying the illegitimate takeover of our business in Russia... As a result, we will fully impair the value of our business in Russia,” Carlsberg said in a Tuesday statement.
The initial shock of the Kremlin’s nationalisation of the Baltika brewery has worn off and Carlsberg is trying to stop Baltika from selling beer in Russia under its brand names: Carlsberg, Tuborg Green and Kronenbourg 1664 (three of the five most popular beers in Russia). In its statement, Carlsberg said it was terminating agreements allowing the local subsidiary to sell the company’s products. Baltika is trying to dispute this decision in a Russian court while also hedging its bets by registering alternative brand names: “Greenbeat” instead of Tuborg Green and “Krone Blanche” instead of Kronenbourg 1664.
The most intriguing part of the Carlsberg statement was that the company “refuses to be forced into a deal on unacceptable terms, justifying the illegitimate takeover of our business in Russia.” They seem to be hinting that, even after the Kremlin ordered the nationalisation of the company, Carlsberg
66 RUSSIA Country Report November 2023 www.intellinews.com