Heineken and Carlsberg leave Russia

The Danish company Carlsberg, which has 8,400 employees in Russia, said it is seeking to “completely sell” its business but will keep operations at a reduced level “to support the livelihoods of these employees and their families” until the sale is completed.

“The war in Ukraine and the worsening humanitarian and refugee crisis shock us all. We continue to strongly condemn the Russian invasion that caused so much loss of life, destruction and tragedy,” said Carlsberg CEO Sies t Hart. in a statement.

Carlsberg Russia reported revenue and operating profit of DKK 6.5 billion ($958 million) and DKK 682 million ($100 million), respectively, in 2021. The group said on Monday that the disposal would result in a “significant” impairment loss.

Heineken (HEYNE) has already suspended new investments and exports to Russia, as well as stopped the sale, production and advertising of its Heineken brand beer in the country.

“We are shocked and deeply saddened that the war in Ukraine continues to unfold and escalate,” the Dutch brewer said in a statement.

Brewing company Moretti and Amstel said it intends to transfer the business to a new owner, while complying with Russian and international laws.

“In order to ensure the continued safety and well-being of our employees and minimize the risk of nationalization, we have concluded that it is critical to continue our recently reduced operations during this transition period,” the company added.

The brewery said it will pay wages to its 1,800 employees in Russia until the end of 2022 and will “do everything we can to keep them employed in the future.”

Heineken expects to receive losses of 400 million euros (439 million dollars) from the move.

“After the completion of the transfer, Heineken will no longer have a presence in Russia,” the company said in a statement.

In February, Heineken reported that volumes of its Russian beer were up a few percentage points in 2021, driven by stronger demand for premium brands Heineken, Miller and Dr Diesel. The company also reported growth in its market-leading cider business in Russia.

Dozens of companies in all sectors of the economy have left Russia or suspended their activities there since the February 24 invasion.

Competing brewer AB InBev (BUD), maker of Budweiser and other brands, said it had “asked the controlling shareholder” of its operations in Russia to suspend its license to manufacture and sell Bud in the country. The company also “forfeits all financial benefits” from the joint venture. Employees will still get paid.

Leave a Reply

Your email address will not be published. Required fields are marked *