2023-08-25 12:31:24
Brewer Heineken stops all its activities in Russia. The Russian Arnest Group takes over all shares for the symbolic amount of 1 euro. Heineken expects the loss as a result of the acquisition to amount to EUR 300 million.
Arnest Group is a packaging solutions company. It is also one of the largest producers of cosmetics, household products and metal packaging in Russia, Heineken reports. Top man Dolf van den Brink calls it a reliable party. “It has been an important supplier to Russia for years and they are not on any sanctions list,” he says.
The deal includes seven breweries and 1800 employees. In the agreement with Arnest Group, it has been agreed that Heineken’s Russian staff will receive a job guarantee for a period of three years.
The production and sale of the Amstel beer brand will be phased out over a period of six months, but according to the company it will not be profitable. It is also not possible to return in the long term, other than completely starting over in the country.
Beer no more expensive through sales
Heineken will not make its beer more expensive to compensate for the expected loss, Van den Brink assures. “We have already spread the pain in steps.” In the figures for the first half of 2023, the brewer wrote off 113 million euros for this and 88 million before that.
The brewer began the process of withdrawing from Russia in March 2022, shortly following the Russian invasion of Ukraine. Sales of the Heineken brand already stopped at that time, but the brewer continued to work in the country with other brands.
According to the brewer, since then there has been no profit from beer sales in the country. However, withdrawing proved difficult due to uncertainty regarding the rules applied by Russian authorities.
Process took longer than expected
The Heineken CEO admits that the process has taken much longer than originally expected. But according to him, “this transaction secures the future of our employees”. It also offers Heineken “the opportunity to leave Russia in a responsible manner”, says Van den Brink.
Heineken had to go through the dust before. As it turned out following research of news site Follow the Money that the Russian branch of the beer brewer had launched dozens of new products in 2022. Heineken then stated that it “should have been clearer sooner regarding the need to introduce new products” in the country.
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