Heineken says it will keep its promise to leave Russia
Heineken will keep its promise to leave Russia, 23 February 2023
...We are very concerned with recent news publications incorrectly stating “Heineken has broken its promise to leave Russia”. This is categorically untrue and misleading.
We’re working hard to transfer our business to a viable buyer in very challenging circumstances and we expect at a significant financial loss to the company, amounting to around €300M. In the meantime, our local colleagues at HEINEKEN Russia are doing what they can to keep the business going, after fully delisting the Heineken® brand, to avoid nationalisation and ensure their livelihoods are not at risk.
The business is ringfenced and they are self-funding all operational expenses. Let us be clear that there is no exchange of funds between HEINEKEN and our local business in Russia and we do not receive any dividends, corporate fees or royalties (for any brand).
The war in Ukraine is a terrible human tragedy. As we exit our business in Russia, we aim to do this the right way, fulfilling our firm commitment to both the exit and to our people. We aim to reach an agreement in the first half of 2023...
Why have new products been introduced in Russia?
In the context of the risks noted above, the local Russia management team, which is leading the business fully on its own with no HNV support, made decisions to introduce new products to fill their financial gaps and keep the business running until a sale could be completed.
When we pulled brand Heineken, Miller and Guinness (the latter two being third party licensed brands) out of the Russian portfolio, the OpCo faced a major financial gap to stay afloat. The Russian business is ring-fenced, meaning no cash is going in and no cash is going out. This means that the local Russian team had to figure out how to stay solvent on their own and not bankrupt the business so they could continue to take care of employees, pay salaries, pay their suppliers etc. This is also part of the reason that Amstel remained in the portfolio (although HNV doesn’t receive any royalties nor has any involvement in the brand in Russia going forward). Without Amstel, the business would most likely have gone bankrupt and there was a real risk that it would be nationalized...
Next steps
As we move forward, we continue to prioritize care for our people during this transition while finding a suitable buyer in line with our values and in full compliance with international and local laws. Throughout, we have sought to balance our responsibilities in three areas: to protect our employees; to respect the law; and to find the best possible buyer that can give employees the best chance of secure future employment.
It is challenging to close a transaction in Russia at the moment as rules continue to shift. We aren’t dragging our feet and do wish things would move more quickly. With that said, all things remaining the same, we aim to reach an agreement in the first half of this year.