The ex-president of the Baltika brewing company Denis Sherstennikov and its vice-president Anton Rogachevsky have been placed under arrest until December 30. They are charged with fraud, which allegedly consisted of ceding rights to part of Baltika’s brands to foreign structures of its parent Carlsberg Group. Baltika itself was transferred to the management of the Federal Property Management Agency. According to Kommersant sources and experts, the purpose of the transfer of rights could be the production of Russian beer brands at Carlsberg factories in neighboring countries, where they would constitute real competition for the products of Baltika itself. Market participants also admit that Carlsberg is trying to protect its brands in case of a return to the Russian market.
The Vyborg District Court of St. Petersburg considered the petitions of the Main Investigation Department (GID) of the regional Main Directorate of the Ministry of Internal Affairs to place in custody until December 30 the ex-president of Baltika Denis Sherstennikov and its vice-president for legal issues Anton Rogachevsky. Top managers were detained the day before as part of a criminal investigation under Part 4 of Art. 159 of the Criminal Code of the Russian Federation (fraud on an especially large scale).
They are suspected of illegally assigning for a long time to foreign structures affiliated with the Carlsberg Group the rights to lease Russian brands (before the presidential decree of July 16 on the transfer of Baltika to the temporary management of the Federal Property Management Agency).
The case materials say that Messrs. Sherstennikov and Rogachevsky “by deception” acquired for more than 295 million rubles. in favor of Carlsberg Kazakhstan LLP and Vista BiUi Co LLC (part of the Carlsberg Group) for the period 2023–2042, the intellectual property right owned by Baltika, which allowed the export of products to Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan, Mongolia , Belarus. As a result, the investigation believes, they caused damage to the enterprise and the Russian Federation itself, represented by the Federal Property Management Agency.
Baltika was part of the Carlsberg Group. After the company was transferred to the Federal Property Management Agency (see “Kommersant” dated July 17) its founder, Taimuraz Bolloev, became its president. The Carlsberg Group called this an “illegal takeover” and announced the termination of agreements allowing Baltika to produce the group’s products, including international and regional brands. Baltika is challenging the termination of the agreements in the Arbitration Court of St. Petersburg and the Leningrad Region and has achieved a ban on Rospatent to terminate licenses for the Seth & Riley’s Garage, Holsten, Kronenbourg and Tuborg brands.
Brands and agreements
According to Kommersant, in 2022 Baltika produced 197.42 million decaliters of beer and beer drinks, ranking second in Russia after AB InBev Efes. According to a Kommersant source in the market, the transfer of rights to the Vista BiUi Co and Carlsberg Kazakhstan brands could initially be preparation for a deal to sell Baltika. Also, Kommersant’s interlocutor believes, Carlsberg could try to preserve some of the local brands in case of returning to Russia “after the situation has stabilized.” Kommersant’s sources do not know which brands were transferred.
According to Fontanka, we are talking about the Zatecky Gus brand, which, according to Rospatent, belongs to the Czech Garfio Czech Republic sro, a subsidiary of Baltika. Baltika also owns the rights to the flagship brand, the brands Arsenalnoye, Don, Zhigulevskoye, etc. In the Arnest group, which Interfax sources called a potential buyer of Baltika and Carlsberg Group, Kommersant is not answered. A Baltika representative declined to comment.
In mid-October, Baltika filed claims against Vista BiUi Co and Carlsberg Kazakhstan with the Arbitration Court of St. Petersburg and the Leningrad Region to invalidate the license agreement and cancel the transaction.
The second defendants are the Danish and Swedish structures of Carlsberg, respectively. Then Kommersant’s interlocutors said that Baltika was trying to prohibit the use of its brands for production at Carlsberg facilities in other countries. The hearing on the claim against Carlsberg Kazakhstan was postponed until December 25, on the claim against Vista BiU Co. – scheduled for November 17, it follows from the file of cases.
Igor Khavsky, co-owner of the distributor SWAM Group and the Gletcher brewery, says that if the production of brands from the Baltika portfolio is established in neighboring countries at factories controlled by Carlsberg, they will compete with Baltika beer in the markets of the former USSR and could even be supplied to the Russian Federation. According to him, Baltika’s flagship brand, known abroad, can also have value in foreign markets. In 2021, Baltika increased its export revenue by 19.7%, to 5.8 billion rubles, according to the company’s reporting (7.1% of total revenue).
Vasily Zuev, head of the intellectual property practice at the Intellectual Capital law firm, agrees that granting licenses for brands that have long proven themselves in the market of Russia and neighboring countries to others “can cause significant damage to the company.” According to him, the copyright holder can cancel the grant of licenses, but only in cases provided for by the agreement.
Speculation and assumptions
Speaking in court, representatives of the investigation cited as one of the main arguments in favor of arresting the defendants the opportunity that businessmen have to escape from Russian justice abroad. In particular, the GSU employee argued, Mr. Sherstennikov, his wife and daughter have Turkish citizenship, as well as real estate and bank accounts in this country, while his son lives in Hungary. In addition, a representative of the investigation said, Denis Sherstennikov owns four apartments and a country house in Russia, that is, “he is a wealthy person, which means he has the opportunity to provide for himself and his family while abroad.”
The investigation also substantiated the version of Mr. Sherstennikov’s intention to hide with materials from operatives, which allegedly indicate that the person involved was negotiating with Denmark about obtaining a work visa and was going to get a job at the Carlsberg head office, where his former subordinate Elena Kuzmina (who held the position of director of Baltika) already works » on legal issues, marketing and export). The GSU representative added that the person involved “can put pressure on witnesses or destroy evidence.”
The defense and the defendant himself opposed the investigation’s request.
“I did not receive a work visa – it was an ordinary visa, for which I can provide evidence,” Mr. Sherstennikov told the court. “I just used Carlsberg as a last resort to get Schengen and visit my son abroad.”
Turkish citizenship, the defendant added, was only needed to open accounts abroad and pay for his son’s studies.
“I quit voluntarily last month. The external manager wanted me to continue working, seeing what was happening in recent weeks with Baltika,” said Denis Sherstennikov. “My work as president of the company is evidenced by the company’s excellent financial results. “I will cooperate with the investigation and would like to continue to help Baltika.” Mr. Sherstennikov asked to include in the case the characteristics of his colleagues and employers who could vouch for him.
The businessman’s lawyer called the investigator’s arguments in favor of the arrest “speculation and assumptions.” “He cannot put pressure on Baltika employees, if only because he does not work in the company’s office,” the defense lawyer emphasized. “And he cannot destroy the documents, since they have already been confiscated from him.”
The defense offered to release the businessman on bail of 1 million rubles, but the court sided with the investigation and granted the request for arrest.
A meeting to consider the petition for the arrest of Anton Rogachevsky took place according to a similar scenario. In his case, the defense pointed to the presence of three children, a number of diseases, as well as the fact that at Baltika he is still involved in litigation, defending the company’s interests in arbitrations. However, the court was not impressed, and the vice-president of Baltika was also sent to a pre-trial detention center.