Carlsberg Group Halts Advertising of Carlsberg and Baltika in Russia, Pulls Financial Guidance
Global brewer Carlsberg Group – maker of Russian beer brand Baltika – has stopped advertising its Carlsberg flagship and Baltika in Russia, CEO Cees ’t Hart announced this week.
Since Russian forces invaded Ukraine on February 24, Carlsberg has stopped new investments in and exports to Russia, donated €10 million to support humanitarian efforts in Ukraine, and paused the production and sale of the Carlsberg brand.
However, Carlsberg-owned Baltika Breweries will remain operational and “will be run as a separate business, with the purpose of sustaining our employees and their families,” ‘t Hart wrote.
“We feel a moral obligation to our Russian colleagues who are an integral part of Carlsberg, and who are not responsible for the actions of the government,” he wrote. “We have been owners of Baltika Breweries since 2000 and majority owners since 2008. Our 8,400 employees in Baltika represent more than one in every five of our total global workforce.
“They value working for Carlsberg, which is known for honesty, fairness and a strong values-led culture,” ‘t Hart continued. “However, this cannot be business as usual.”
Sales in Russia and Ukraine accounted for 13% of Carlsberg Group revenue and 9% of its operating profit from its three regions.
“Due to the very high uncertainty related to Ukraine and Russia and the possible indirect impact on the rest of the Group, we do not consider it prudent to provide guidance for 2022 and are therefore suspending our earnings guidance for the year,” ‘t Hart wrote.
Meanwhile, Anheuser-Busch InBev has requested its joint venture partner, Turkish brewer Anadolu Efes, pause the production and sale of Bud in Russia.
“We do not have a controlling stake at the joint venture and do not consolidate it in our accounts,” A-B CEO Michel Doukeris said in a media release. “We have requested the controlling shareholder to suspend the license for the production and sale of Bud in Russia. Furthermore, we are forfeiting all financial benefit from the joint venture operations.”
In addition to the stoppage of production and sales, A-B is providing housing and monetary support to its 1,800 workers in Ukraine. A-B said it has donated to the Red Cross and is working with other organizations to provide “food, blankets, medical supplies and 2 million cans of emergency drinking water to Ukraine and surrounding refugee relief areas.”
“The joint venture employees in Ukraine and Russia will continue to be supported and paid,” Doukeris said. “We are focused on supporting our employees, their families and the humanitarian relief efforts in Ukraine while wishing for peace.”
Earlier this week, Heineken announced it would stop the production, sale and advertising of the Heineken brand in Russia, which it said accounted for less than 2% of its global sales. Molson Coors also suspended the “limited sales” it has in the country.
Several global companies across sectors have announced plans to stop sales in Russia in the wake of the invasion, including Starbucks, McDonald’s, Ford, Apple, BP, and many others.
White House Bans Import of Russian-Made Alcoholic Beverages
President Joe Biden announced an executive order (EO) today that will prohibit certain imports, exports and new investments in Russia.
The ban on imported products of Russian origin includes “fish, seafood, and preparations thereof; alcoholic beverages; non-industrial diamonds; and any other products of Russian Federation origin as may be determined by the Secretary of the Treasury.”
“The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of luxury goods” is also prohibited.
In addition to the EO, Biden announced that the E.U. and G7 nations (Canada, France, Germany, Italy, Japan, the United Kingdom and the U.S.) have moved to revoke Russia’s most favored nation status as it pertains to international trading.
“Each of our nations is going to take steps to deny most favored nation status to Russia,” he said. “A most-favored-nation status designation means two countries have agreed to trade with each other under the best possible terms — low tariffs, few barriers to trade and the highest-possible imports allowed.”
BA: February Was Fourth Largest Monthly Beer Price Increase on Record
February 2022 marked the fourth-largest monthly beer price increase on record, dating back to 1969, according to Bart Watson, chief economist at the Brewers Association.
The price for “beer at home” – or packaged beer – increased more than 2% month-over-month in February, Watson shared on Twitter.
Because I'm sure you were all wondering (ok, I was wondering and now I'm going to tell you), February was the 4th largest monthly beer price increase on record (back to 1969).
The highest was January 1991, at 6.1% month over month (seasonally adjusted). pic.twitter.com/iaQp7BMHuN
— Bart Watson (@BrewersStats) March 10, 2022
“Bev alc still lagging overall inflation, but definitely seeing signs of beer price movement in the Feb. CPI [Consumer Price Index] numbers,” Watson said. “Largest monthly jump in the past decade.”
January 1991 recorded the highest price increase, with a 6.1% rise month-over-month, seasonally adjusted.
I'm hearing from some brewers that their price increases will take effect March 1 or April 1, so will be interesting to see the next two numbers.
— Bart Watson (@BrewersStats) March 10, 2022
Watson said some brewers have yet to implement price increases, so numbers may continue to change in the coming months.
“One thing the CPI data doesn’t tell us is the breakdown of how much increases are driven by higher price increases than in the past by brands that took price vs. more brands taking price,” he added. “Will be interesting to break that apart.”
Brooklyn-Based Non Sequitur Beer Projects Restyles as NS Beer
As it prepares to begin brewing at its brewery and taproom in the Bushwick neighborhood of Brooklyn, former “nomadic beer brand” Non Sequitur Beer Project has announced it will restyle itself as NS Beer and unveiled a new logo.
“The inclusion of the word project was an intentional choice at the outset because it was an impermanent pop-up endeavor,” co-founder Gage Siegel told Brewbound. “As we shift into this space, that is permanent. It’s just not a project anymore.”
Co-founder Simone Schroeder said the spelling and pronunciation of Non Sequitur proved tricky for consumers, wholesalers and retailers and leaning into NS Beer or NSB, which many had taken to calling the brewery, will help “make our name less of a barrier for people.”
“At the end of the day, we realize that Non Sequitur Beer Project was not smart branding for a variety of reasons, and are hopeful that with the use of NSB, people will have a better understanding of who we are,” Schroeder said.
The taproom, which has been open since August, will be christened with an opening party on April 9, as construction delays postponed the installation of brewing equipment.
Last summer, two women publicly accused Siegel of sexual assault, and the New York City Brewers Guild revoked the brewery’s membership. The revocation was one of the first punitive measures a brewing trade organization has taken against one of its members since Brienne Allan (@ratmagnet) and @EmboldenActAdvance brought women’s stories of abuse and assault to the forefront of the craft beer industry.
Since then, NS Beer has published a code of conduct to its website and inside its taproom, as well as set up a reporting platform through WeVow.
“We will continue to work on that,” Siegel said of the code of conduct. “It’s a living document and it’s something that changes as we grow, as we have more people on our team, and as time goes on, as we learn more things.”
Schroeder and Siegel have taken trainings on allyship, anti-harassment, and diversity, equity and inclusion theory hosted by the Brewers Association, Hollaback and Women of the Vine and Spirits.
“It’s policy in the future, when we do hire any new employees, that they would take the same trainings,” Siegel said.
Following the revocation of Non Sequitur’s membership, the guild tasked the brewery with some work required for readmittance. Siegel said they have submitted evidence of the brewery’s progress. A spokesperson with the guild said the organization is reviewing it.
“The mission of the New York City Brewers Guild is to advocate for and promote awareness of its local brewing members; to increase the visibility of local beers through marketing, events, and consumer education; and to foster a healthy, ethical, and growth-focused craft beer industry throughout the city,” the guild said in a statement shared with Brewbound.
“All decisions by the NYC Brewers Guild are made with respect to all parties involved, and the situation at hand. NS Beer has submitted their work, but their membership status remains revoked as steps outlined for reinstatement are reviewed.”
The decision to restyle from Non Sequitur to NS Beer struck the two women who came forward last summer as “tone deaf.”
“It feels tone deaf at best, and at worst an intentional attempt to distance Non Sequitur and Gage as a brand from Gage’s actions,” said Caroline, who asked that her last name not be published.
“I still have to wake up every single day and encounter things that remind me of what he did to me, and I don’t get to turn that off,” she said. “I don’t get to rebrand myself, get some new colors and call it a day. There’s no logo to flip, because this is my life, and there’s no reason why it shouldn’t follow him in the same way.”