Why Heineken sold its multi-millionaire business in Russia for one euro

Heineken’s operations in Russia include ownership of 7 factories employing 1,800 workers. However, the Dutch brewery decided to sell it all for one euro.

Heineken said it would incur a €300m loss on the sale of the division, which will be transferred to Russia’s Ernst, a maker of aerosol cans.

With this decision, the company will permanently cease its operations in Russia, after nearly a year and a half of its commitment to do so.

Many Western companies left Russia when that country invaded Ukraine in February 2022.

“It took much longer than we expected,” said Dolf van den Brink, CEO and Chairman of the Board of Directors of Heineken.

“[Pero] He added that this deal guarantees the livelihood of our employees and allows us to leave the country responsibly.

Thanks to this deal, Arnest will take ownership of seven breweries for just €1, but also gain the commitment to employ and keep 1,800 workers over the next three years.

Manufacturing of the Amstel beer brand will be phased out within six months, joining production of Heineken beer which the company says will be phased out in 2022.

“Recent events show the great challenges faced by large manufacturing companies when exiting Russia,” Van den Brink said.

And last month, President Vladimir Putin seized the Russian assets of Carlsberg and French yogurt maker Danone.

Earlier this week, DP Eurasia, the Domino’s Pizza franchise in Russia, said it would close its Russian stores and bankrupt the company.

The company said it would not even attempt to sell the operation due to the “increasingly difficult environment”.

Russia has been subject to a series of economic sanctions since its tanks entered Ukraine on February 24, 2022.

Many of the big names decided to shut down their operations immediately after the invasion. Others, such as McDonald’s and Coca-Cola, have faced pressure to finally exit Russia.

There was also constant criticism of those who continued to do business in the country.

The Yale University School of Management keeps track of which companies have left and which have stayed. Among the remaining companies are companies such as British telecoms firm BT Group and Lacoste, the French luxury sportswear brand.