Global brewer Heineken has announced it will dispose of its Russian business and leave the country due to its war on Ukraine.
Heineken said it was “shocked and deeply saddened to watch the war in Ukraine continue to unfold and intensify”.
It had earlier announced it would stop new investments and exports to Russia, end the production, sale and advertising of the Heineken brand, and that it would not accept any net financial benefits or profit from its business in Russia.
However, it has today announced that its ownership of its Russian business is ”no longer sustainable nor viable in the current environment”.
It said it aims for an orderly transfer for the business to a new owner in full compliance with international and local laws.
“To ensure the ongoing safety and wellbeing of our employees and to minimise the risk of nationalisation, we concluded that it is essential that we continue with the recently reduced operations during this transition period,” it stated.
It will guarantee the salaries of its 1,800 employees will be paid to the end of 2022 and “will do our utmost to safeguard their future employment”.
Heineken said it will not profit from any transfer of ownership and therefore will take an impairment of €400m on the business.
“Upon completion of the transfer Heineken will no longer have a presence in Russia,” it said. “We continue to hope that a path to a peaceful outcome emerges in the near term.”
Heineken’s Russian arm represents 2% of its global annual sales.
The group has become the first major brewer to completely exit the country, with other international alcohol players scaling back operations in the country, but retaining a presence.
Danish rival Carlsberg has a more significant Russian operation, accounting for around 9% of its revenues, through its ownership of Russia’s biggest brewer Baltika.
Carlsberg has said it will stop selling Carlsberg branded beer in Russia and will not make any new investments in the country. Nordnet analyst Per Hansen said Heineken’s decision today “does not make the situation easier for Carlsberg”.