Carlsberg and Heineken ready to sell their business in Russia

Heineken factory, in Mons-en-Barœul (North), in 2014.

A few hours apart, Carlsberg and Heineken gave their verdict on their establishment in Russia. The two brewers have, in fact, announced, Monday, March 28, that they were ready to withdraw and sell the assets they have in this country.

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Heineken drew first. The Dutch group has revealed its intention to leave Russia. At the beginning of March, he had already made the decision to no longer produce and market his flagship brand Heineken in this country, to stop all promotional operations and to no longer reap profits on the spot. This time, the idea is to transfer ownership of the brewer’s assets to a new shareholder. However, pending this sale, and to avoid any risk of nationalization, the subsidiary continues its activity. Heineken is also committed to ensuring that its 1,800 employees will be paid until the end of 2022.

Tax increase

The Dutch entered the Russian market in 2002 by buying a first brewery in Saint Petersburg. It now has seven throughout the territory, where it markets international brands such as Heineken or Amstel but also local brands such as Okhota, Sedoy Ural or Amur Pivo. The group, which gives no details on its volume of business, estimates that its withdrawal from Russia will result in its accounts by a loss of 400 million euros.

Carlsberg was ahead of its rival, since it took its first steps on the Russian market in 2000. In 2008, it became the majority shareholder of the company Baltika Breweries, created in 1990 in Saint Petersburg. Four years later, the Danish became the sole owner. Since then, the journey of this subsidiary has not been easy. Like all its competitors, it found itself confronted with tougher regulations, higher taxes, the devaluation of the ruble and price wars. It was even forced to close two factories in 2015.

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Following the invasion of Ukraine, Carlsberg explained on March 9 that he was launching a strategic review to assess his position in Russia. His conclusion therefore fell. “We have made the difficult and immediate decision to completely divest our business in Russia,” the group said in a statement. The Danish, which has eight factories and employs 8,400 people in Russia, estimates the turnover of its subsidiary at 870 million euros and its operating profit at 90 million euros. The brewer, which has not quantified the amount of the accounting loss linked to this withdrawal, also undertakes to continue the activity as long as the sale is not effective.

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