- Heineken’s Loss on Sale of Russian Business
- Challenges in Exiting the Russian Market
- Impact of Sanctions and Asset Confiscations
After the West imposed unprecedented sanctions on Moscow, numerous multinational corporations fled the country, but the Kremlin retaliated by confiscating some assets.
Heineken lost £256 million after selling its Russian division for 86 pence.
After the Ukraine turmoil, the Dutch brewing giant, which makes Amstel and Birra Moretti, was criticised for its delayed exit.
The procedure “took much longer than we had hoped” and executives stressed the significance of caring for local personnel.
Heineken had initially announced that it would leave Russia in March 2022, stating that its operations there were “no longer viable or sustainable in the current environment.”
Dolf van den Brink, chief executive officer, stated, “Recent events demonstrate the significant obstacles that large manufacturing companies face when exiting Russia.”
Arnest, the new proprietor of the Russian subsidiary, has pledged to employ 1,800 locals for the next three years.
Besides selling cosmetics and household goods, Arnest Group is the largest Russian aerosol and can packaging firm.
The country lost Heineken last year, but Amstel will be phased out over the following six months.
After the West imposed unprecedented sanctions on Moscow, numerous multinational corporations fled the country. But the Kremlin retaliated by confiscating some assets.
According to Reuters, foreign firms attempting to leave Russia are facing a significant increase in costs as Russia demands greater markdowns on the prices of the assets they wish to sell.
President Vladimir Putin signed a decree last month to seize control of a Russian subsidiary run by the French dairy manufacturer Danone. Also Carlsberg’s stake in a local brewery.
Heineken believes that despite the multimillion-pound loss, the bargain-basement transaction will have a negligible impact on its full-year outlook.
