Prakriti Deb, Pune
Dutch beer giant Heineken has finalized its exit from the Russian market, selling its operations to the Russian company Arnest Group for a mere one euro. This deal was approved and is expected to result in losses of around 300 million euros for Heineken.
The company had announced its plan to withdraw from Russia in March 2022 due to challenges posed by the situation in Ukraine.
After Western countries imposed sanctions on Russia, many global companies decided to leave the country. However, Russia responded by taking control of some foreign assets. This has made it more difficult for companies to exit Russia, and some have faced higher costs.
In a similar situation, the Russian government took control of a French yoghurt maker’s Russian branch and a beer company’s stake in a local brewer. Another beer company, Anheuser-Busch InBev, also plans to leave its Russian joint venture.
Heineken’s CEO, Dolf van den Brink, stated that while the experiences of other companies increased their concerns, it didn’t drastically change their timeline. The process of finding a buyer was complex and took longer than expected. He claimed that Heineken is satisfied to have found a suitable buyer and is glad to conclude this process and leave Russia.
The beer company had several breweries and employees in Russia, who will be guaranteed employment for the next three years.
Arnest Group is a Russian company known for can packaging, aerosol manufacturing, and selling cosmetics and household goods. The deal with Arnest Group does not allow Heineken to buy back the business. It includes a three-year license for some smaller regional brands, but Heineken will not provide support for these brands or receive any profits from them.