Economy After Putin Decree
Kadyrov’s nephew takes over management of Danone in Russia
Status: 19.07.2023 | Reading time: 2 minutes
View of a Russian branch of Danone
What: AFP
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On Sunday, Russian President Vladimir Putin put the Russian businesses of the European companies Danone and Carlsberg under compulsory control. Now it is clear who will take over the management of the Danone operation: Ibragim Sakrijew has influential relatives.
A nephew of Chechen ruler Ramzan Kadyrov takes over management of Danone’s Russian business. The Chechen government announced on Tuesday evening that 32-year-old Ibragim Zakriyev was the new general director of Danone Russia. “His election shows that the representatives of the team of Chechen leader and Hero of Russia Ramzan Akhmatovich Kadyrov are talented and successful managers,” it said. Kadyrov is considered a close ally of Russian President Vladimir Putin.
On Sunday, Russia took control of the shares of the French food group Danone and the Danish brewery Carlsberg in their Russian subsidiaries by presidential decree. Both companies were presented with a fait accompli. The decree said the Russian state would “temporarily” manage the shares of Danone Russia and Carlsberg subsidiary Baltika.
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Unlike many other international companies, Danone initially stayed in Russia after the Russian attack on Ukraine. At the end of October, the group finally announced that it was ending most of its activities in Russia. Danone will exit its dairy and plant-based products business and only maintain its infant formula business.
The Carlsberg Group announced in March 2022 that it would stop production and sales in Russia. The Baltika subsidiary continued to operate as an independent company to support the 8,400 workers in Russia. Carlsberg recently held a 27 percent share and also brewed foreign brands such as Warsteiner, Holsten and Tuborg under license. Carlsberg announced in June that it would sell the block of shares to an unnamed buyer, but this requires approvals.
Danone has to write off a billion
Danone said on Sunday that it is currently assessing the situation and preparing “to take all necessary measures to protect its rights as a shareholder of Danone Russia and the continued existence of the business in the interest of all stakeholders, especially its employees”. The Russian decision had “no impact on Danone’s financial targets” for 2023.
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In a step similar to the decree now signed by Putin, Russia placed the national companies of the energy companies Uniper from Germany and Fortum from Finland under state control in April.
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20 percent down since January
Since Russia attacked Ukraine last year, numerous Western corporations have withdrawn from Russia. In connection with a possible or completed closure of the respective business, high write-downs were often associated.
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