The criticized Heineken is now finally leaving the Russian market. For a symbolic euro, the company sold its seven breweries to the Arnest Group, among other things.
The Dutch brewing group Heineken has completed the sale of its activities in Russia and will now leave the country for good. The Russian Arnest Group will take over all shares, including seven breweries, for a symbolic price of one euro, the company announced today.
Heineken is happy to have completed the long and complex search for a buyer and left Russia, said CEO Dolf van den Brink. The company expects a loss of around 300 million euros. All 1800 employees are to keep their jobs.
Heineken admits mistakes in communication
After the start of the Russian invasion of Ukraine in February 2022 and Western sanctions, many Western companies have left Russia. Heineken, which had operated seven locations in the country, also began withdrawing in March 2022. Beers under the brand have not been sold since. However, the brewer came under criticism because other activities continued and new brands came onto the market.
The company then admitted errors in communication. The withdrawal from Russia took longer than expected, van den Brink said today. “Although it has taken much longer than we had hoped, this transaction will ensure the livelihoods of our employees and allow us to exit the country in a responsible manner.”
The sale and production of the Amstel beer brand, which also belongs to Heineken, will also be discontinued in the next six months. Arnest Group is the largest Russian manufacturer of cosmetics, housewares and metal packaging. According to Heineken, a job guarantee has been agreed for the approximately 1,800 employees for the next three years.
Withdrawing from Russia is likely to be even more expensive
For Western companies, the already complex withdrawal from Russia could become even more difficult in the future. Because the Russian authorities are urging companies to value their activities put up for sale at further significant discounts, several insiders told the Reuters news agency. The required additional impairments could then amount to up to 30 percent.
For the remaining corporations, it could become even more expensive than it already is. The Russian Treasury said it was not applying pressure to drive prices down. However, the price tag for activities can change if they are not properly rated. Among others, the major Italian bank Intesa is currently negotiating the conditions for its market exit.
The Austrian Raffeisen Bank International (RBI) has also been examining options for an exit such as a sale or a spin-off of the business for months. The nationalized Düsseldorf energy group Uniper said it had reached an agreement in 2022 to sell its Russian subsidiary Unipro to a domestic buyer, but was not given the go-ahead. With the stroke of a pen, Russia placed the share of Heineken competitor Carlsberg in a local farmer under state administration.