November 2023

Never has the life of a business executive been so risky. In September, word spread that two businessmen working for global firms were not permitted to leave China. A worse fate befell a Japanese employee at the Chinese arm of Astellas Pharma. He had been detained since March on espionage charges and was formally arrested in October. Four other Japanese nationals are currently held in China. But it was the news (17 November) that two Baltika executives were seized by Russian authorities over allegations of fraud which set international headlines on fire. Allegedly, Denis Sherstennikov and Anton Rogachevsky, Baltika’s CEO and vice president, illegally transferred intellectual property rights to Carlsberg during the government takeover. If found guilty, they could spend up to 10 years in prison. Baltika legal counsel, Elena Kuzmina, who was also a suspect, reportedly managed to flee Russia. So why did Carlsberg not fly out its top people while there was still time? Heineken’s Boudewijn Haarsma, who had led the Russian unit since 2018, left in spring 2022 soon after the brewer’s announced exit. He became managing director of Heineken UK. Could it be that Carlsberg underestimated the Russia risks?

Baltika brewery: The Kremlin’s de-privatisation policy

Russia – Mr Putin may deny it, but de-privatisation is definitely taking place. The court-mandated asset seizures of Baltika and Danone in July are not isolated cases. They are part of a broader strategy, impacting the oil and gas sector, infrastructure facilities, enterprises related to the military-industrial complex, the chemical industry, and agriculture. Both Russian and foreign businesses are affected.

As Nikolai Petrov, a Fellow of Chatham House, a thinktank, sees it, “the project is intended to redistribute wealth to a new generation of less powerful oligarchs – and shore up President Putin’s own position after the shock of the Prigozhin mutiny and the failure to prevail in the country’s war on Ukraine.”

In other words, Mr Putin’s cronies are handed over businesses, which they can grow and milk. But ownership and inheritance will be severely curtailed because the assets ultimately belong to the state.

Mr Petrov added that de-privatisation renders private property rights in the country null and void. All property is contingent on an individual’s relationship with Mr Putin.

Take Taimuraz Bolloyev. Almost two decades after stepping down as president of Russia’s then largest brewer, Baltika, he is back in charge at his former firm. According to the Financial Times (FT), he has set out to restore it to what he considers its 1990s heyday, before its acquisition by Carlsberg.

AB-InBev launches Via Roma lager and locally brewed Leffe in UK

United Kingdom – What do punters see in all those Mediterranean lagers? Thanks to their popularity, AB-InBev is expanding its UK beer portfolio with the release of a new 4.5 percent ABV Italian-style lager, Via Roma, exclusively at the supermarket chain Sainsbury’s. Like Madri (Molson Coors), Via Roma is brewed in the UK, further muddying the water between a brand’s positioning and its actual provenance.

Per the website, the beer carries a “subtle hint of Italian orange”, as it was “inspired by the eternal city of Rome”. It beats me how anyone can associate Rome with orange groves, but so what.

Earlier this year, some commentators on Reddit remarked that AB-InBev had quietly lowered the ABV of its Leffe beer from 6.6 percent to 6 percent, without reducing the price. The brewer put the recipe change down to the UK’s “consumer palate”. Previously, Leffe was brewed by AB-InBev in Belgium for the UK market. As of this year, all Leffe sold in the UK comes from the group’s Samlesbury brewery. It comes as recent changes in the UK tax regime mean lower-strength beers are taxed less than their stronger peers.

Diageo opens Asia’s first pop-up store in Seoul

South Korea – Diageo, the world’s leading drinks company, must be running out of unique marketing ideas. Like SABMiller before, it is going for pop-up venues to push its brands into select markets. It would have been 15 years ago when brewer SABMiller was the first to open pop-up stores (that is temporary venues) in the UK and South Africa to launch its Peroni beer brand. If memory does not fail me, one UK store was truly bizarre. It displayed bottles of Peroni that punters could only gawk at through the windows as the shop was locked and guarded by security guys.

Diageo’s first pop-up store in Asia opened in a trendy part of Seoul on 25 November, which is known for its upscale boutiques, galleries, and restaurants. According to Diageo, the pop-up store named “The Bar by Airdrop” will run for six months until April 2024 and provide South Korean customers with a variety of brand experience opportunities.

The press misheard: Scottish craft brewer Innis & Gunn is not for sale

United Kingdom – What a brouhaha: Speaking to media at the firm’s AGM in October, Innis & Gunn’s CEO Dougal Sharp said that “the firm is for sale”. He referred to a subsidiary, Flavourly, but some hacks thought it was the Scottish craft brewer itself. At the end of October, the brewer had to issue a statement, saying that Innis & Gunn has no plans to sell up. How could reporters misinterpret Mr Sharp’s remark? Well, the Scottish brewer and pubs chain posted a GBP 2.4 million (USD 3 million) loss last year. This figure only emerged after a media statement highlighted a rise in turnover and gross profit, prompting a flurry of frothy articles on Innis & Gunn’s “strong performance” and growth plans. Innis & Gunn reported a 5.2 percent rise in gross profit from GBP 7.4 million to GBP 7.8 million (USD 9.8 million).