What did the Danone and Baltika takeover signal for business in Russia?
A look back at the decree on foreign-owned assets and other developments reported around 17 July 2023.
What did it mean when Russia moved to take temporary control of Western-owned companies? On 17 July 2023, the question was live after a decree reported the previous day. On 16 July 2023, Russian President Vladimir Putin authorised a temporary state takeover of the shares of French agribusiness Danone and of Baltika, the brewer owned by Carlsberg.
A response to corporate retreat
The measure was presented as part of a wider response to many private companies, these two included, that had reduced their business operations in Russia during the war in Ukraine. Companies worldwide had reacted to Russia's seizure of Ukrainian territory in 2014 and 2022 in different ways. Many ceased operations in Russia or donated, or matched donations, to the Ukrainian government or Ukrainian organisations. Others applied various sanctions.
Seen in that light, the decree was a counter-move directed at firms that scaled back their presence. It affected two well-known names in food and drink, and it placed their Russian holdings under temporary state control.
Support for Kyiv, tension elsewhere
Other reports from the same days showed how widely the war's effects were felt. On 15 July 2023, South Korean President Yoon Suk-yeol made an unannounced visit to Kyiv and met Ukrainian President Volodymyr Zelenskyy. He announced that South Korea would pledge a further US$150 million in aid to Ukraine.
The same day, Russia said it would investigate whether the North Korean Hwasong-18 missile had landed in its exclusive economic zone. On 16 July 2023, Oleg Khorzhan, a Transnistrian communist and opposition leader, was assassinated in a stabbing attack in his office.
What the day showed
The contrast was clear. Governments abroad were adding to financial support for Ukraine, while Moscow was using state power over companies that had pulled back. The Danone and Baltika decision was the most direct example of the war reaching corporate ownership, and it showed that leaving or shrinking operations in Russia could carry consequences for the assets left behind.
