August 30, 2023

Hoppy Endings


Hoppy Endings
A neon Heineken sign. Smit Patel, Unsplash.

It has been a long time brewing, but the Dutch multinational Heineken has finalized its withdrawal from the Russian market by selling off its operations in the country for €1 ($1.08), following the Kremlin’s rigid rules imposed in retaliation to Western sanctions.

In March 2022, Heineken declared its intention to exit the Russian market, reporting that profits were “no longer sustainable nor viable in the current environment.” The company, however, emphasized its commitment to effect a systematic handover to a prospective new owner.

New regulations from Russia's Finance Ministry for asset sales have hindered Western firms. The process is labyrinthine and lasts 6 to 12 months.

The Dutch company faced criticism for its seemingly unrushed approach, however. After more than a year, Heineken announced that they would sell all Russian assets to Arnest Group, Russia’s largest manufacturers of cosmetics, household goods, and aerosol products. As part of the deal, Arnest Group has agreed to oversee Heineken’s local staff’s employment for three years to ensure the livelihoods of 1,800 employees.

Heineken's press service emphasized that the company will neither endorse these brands nor receive any financial gains, including income, royalties, or dividends, from its operations in Russia. In a not-so-hoppy ending, Heineken anticipates a cumulative loss of €300 million ($324 million).

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