Dutch brewing company Heineken has finalized its departure from Russia, selling its business there for a symbolic 1 euro ($1.08), as the nation continues to grapple with the aftermath of a full-scale invasion of Ukraine by Moscow 18 months ago.
Heineken announced the completion of the sale on Friday, disclosing a total loss of 300 million euros ($325 million) for the transaction to the Russian manufacturing conglomerate, the Arnest Group.
The brewer had faced criticism for the gradual pace of its withdrawal following the outbreak of conflict, yet the company insisted it prioritized safeguarding its local workforce in Russia.
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In March of the previous year, Heineken had declared its intention to exit Russia, deeming its operations there as “no longer sustainable nor viable in the current environment.” Despite the decision, the company aimed for a seamless transition to a new owner.
“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,” stated Heineken CEO Dolf van den Brink in a press release.
The sale encompasses all of Heineken’s assets in Russia, including seven breweries. Arnest has committed to maintaining the employment of Heineken’s 1,800 local personnel for a span of three years.
Heineken brand beer was removed from the Russian market in the previous year, and its Amstel brand is set to be phased out within six months, according to the company.
Heineken Global Impact
Heineken recently adjusted its global earnings forecast for the year as price hikes aimed at offsetting escalating costs took a toll on beer sales, leading to reduced profits in the first half.
As the world’s second-largest brewer, the company had warned of the necessity of raising prices to counter the surge in commodity and energy expenses, largely attributed to Russia’s conflict with Ukraine. This resulted in an 8.6 percent decline in net profit, amounting to 1.16 billion euros ($1.28 billion), with a 5.6 percent drop in beer volumes compared to the same period the previous year.
For the full year, Heineken now anticipates “stable to mid-single-digit” growth in operating profit on a like-for-like basis, after an 8.8 percent decrease in the first half to 1.9 billion euros ($2.09 billion). Previously, management had projected “mid to high single-digit” growth.
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