The recently completed divestment of Heineken NV from the Russian market, the latest in a series of western businesses to exit the country in the face of tightening regulations from the current pro-government administration, has been seen as a major victory for the Dutch brewing giant.
In March of 2022, Heineken announced it’s intention to divest, and it has done so in a surprisingly smooth and successful manner. The company sold its entire operation in the country – which included seven breweries and 1,800 employees – to the Russian packaging and consumer goods company Arnest Group for €1 (US$1.08). with financial losses from the exit totaling around €300 million.
Additionally, the buyer of the assets will not have the right to sell Heineken branded products in Russia and the Amstel brand – the second largest in the Russian market – will also be withdrawn from the market.
Heineken has faced consumer pressure to exit Russia for some time, seeing only 2% of their global sales as part of their operations there. They initiated their exit process in March 2022 and just recently received approval from the Russian government to officially complete the sale.
Heineken CEO Dolf van den Brink commented on the process, saying “This was incredibly complex. There was a real risk of prosecution for our people and a real risk of nationalization.” He also highlighted Arnest’s agreement to provide employment guarantees for the next three years to the company’s former employees.
The buyer, Arnest Group, has purchased assets from Western companies in the past, like Ball Corp.’s beverage packaging business for US$530 million in September 2022. Heineken has previously recorded losses of €210 million related to their Russian operations.
This successful exit of an international brand under the challenging circumstances of the current Russian market will serve as a valuable case study to other businesses considering their position in the country.
For its part, Anheuser-Busch InBev continues to have an interest in a Russian brewer, in contrast to Heineken’s full withdrawal from the country. How these two approaches play out – and what lessons can be drawn from Heineken’s successful exit – remains to be seen.
With information from La Republica
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