Dutch brewer Heineken finally exits Russia after selling business for symbolic one euro

Heineken, the Dutch brewer, on Friday (August 25) said that it has completed its exit from Russia by selling its operations to Russia’s Arnest Group for a symbolic one euro ($1). This comes after the company was criticised for continuing sales in Russia more than a year after its invasion of Ukraine.

Why buying a bottle of beer is more expensive than buying Heineken’s Russia business?

The world’s second-largest brewer had first announced its intention to leave Moscow in March 2022, a month after the Russian invasion of Ukraine and recently also acknowledged that the process took longer than expected.

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In a statement, Heineken CEO Dolf van den Brink said, “Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia.”

He added, “While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”

Heineken is expected to incur a total loss of $323 million (300 million euros) from the deal andselling its operations to the Arnest Group, the largest Russian manufacturer of cosmetics, household goods and metal packaging for one euro ($1).

However, the Dutch brewer has said that the transaction would have a negligible impact on its full-year outlook.

As the multinational companies flocked to leave Russia after the West imposed unprecedented sanctions on Moscow amid its war with Ukraine, the Kremlin has retaliated by seizing some assets from these businesses.

This comes a month after Russian President Vladimir Putin signed a decree, last month, to take control of French yoghurt maker Danone’s Russian subsidiary along with beer company Carlsberg’s stake in a local brewer, reported Reuters.

Heineken’s long exit from Russia

Van den Brink told reporters that while he would not like to go into the details about why the search for a buyer took longer than expected and called the process “highly complex”.

He added, “We are happy we found a suitable buyer. We believe it is a reliable party...We are happy this process comes to an end and to be able to leave Russia.”

Meanwhile, Arnest Group has provided all 1,800 of Heineken’s employees across seven breweries in Russia with employment guarantees for the next three years as part of the deal.

The Dutch beer maker also said that it removed its Heineken brand from Russia last year while its production of Amstel is to be phased out within six months, adding no other international brands would be licensed in Russia.

“We have now completed our exit from Russia,” said van den Brink. He also said that the deal also has no option to buy the business back.

(With inputs from agencies)

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