Status: 03/28/2022 1:11 p.m
After other international companies, Heineken is also giving up its business in Russia. The Dutch brewery group will incur high costs as a result of the sale.
The brewery group Heineken has announced that it will end its operations in Russia. The company announced today that it was no longer viable under the current conditions: “That’s why we decided to leave Russia.” The brewery group is the second largest in the world and employs around 85,000 people in total. The company is willing to pay millions for this.
According to Heineken, the goal is an orderly handover of the business to a new owner. The 1800 employees in Russia should continue to be paid until the end of the year. According to Heineken, it does not intend to make a profit from the sale of the Russian business. Instead, a loss of around 400 million euros is expected. The Heineken share is currently increasing slightly.
Huge Russian market
Under the impression of the Russian war of aggression in Ukraine, the brewery group had already stopped new investments in the country and the sale of products to Russia. The production, sale and advertising of the Heineken beer brand was discontinued. In Russia, Heineken manufactures the brands Botsjkarev, Ochota and Tri Medvjedja.
The annual turnover on the Russian beer market is around 16 billion dollars. For comparison: In Germany, the annual turnover of the brewing industry in 2020 was around 8.3 billion dollars. Heineken is the third largest brewing group in Russia and has so far generated around two percent of its annual sales on the Russian market.
Pressure on competitors is growing
Heineken’s competitor Carlsberg had also announced that it would stop producing and selling beers in Russia. Carlsberg’s market share there is around 27 percent. However, the fourth largest brewer in the world is still selling beer there under the Baltika brand name. The subsidiary is majority owned by Carlsberg. Last year, around 13 percent of group sales came from Russia and Ukraine.
Carlsberg said it would donate all profits from its operations in Russia to aid organizations during the humanitarian crisis in Ukraine.
Since the start of the Ukraine war, numerous Western companies have withdrawn from Russia, including Ikea, Coca-Cola and McDonald’s. Most have closed their shops or production facilities for the time being, while Heineken plans to take the sale a step further.