Belarus: Heineken is leaving the country

Heineken is selling its Bobruisk Brewery and is abandoning its own presence in the country.  The Dutch brewing group merges its Belarusian business with Oasis, a beer and soft drink company, which operates breweries in Ukraine, Kazakhstan and Russia and is the No. 1 juice producer in Belarus. The merged business will be owned and operated by Oasis. Heineken brands will be further produce under license, imported and distributed in Belarus by Oasis with long-lasting contracts. Financial details of the deal were not disclosed.

Heineken’s exit is caused by the deterioration of the Belarusian economy and a sharp decline in sales. Belarus and its 9.5 million people experienced since 2011 and even more since 2015 a profound economic crisis with yearly double digit inflation rates and a devaluation of the currency. As a consequence of the diminished purchasing power, the beer market fell by 9% in 2015 and market leader Krinitsa introduced low-price and cheap private label brands which ate into Heineken’s market share of their premium priced brands.

Heineken entered the Belarusian market at the end of 2007 when it bought Syabar Brewing Company in Bobruisk, 145 kilometers (90 miles) south of Minsk. The brewery was by the time the second biggest brewery in the former Soviet country after state-owned brewery Krinitsa.  Heineken wanted to use the Bobruisk brewery as a platform to grow the international Heineken brand in Belarus as well as its imported Russian brands, Botchkarov and Ochota.

Oasis, registered in Limassol, Cyprus, was founded in 2008 by an international group of experienced beverage industry entrepreneurs.  In 2016 it sold over 7 million hectoliters of beer and soft drinks.  Investments include Oasis Belarus with a soft drinks plant in Bobruisk and a brewery in Brest, Oasis Kazakhstan with a brewery in Almaty, Oasis Russia with a brewery in Moscow (Moscow Brewing Co.), First Private Brewery (Persha Privatna Brovarnia) in Ukraine with two breweries in Lviv and Radomysl near Kiev owned in partnership with EBRD and Oettinger Brewery from Germany and Hanseatic Tea Germany from Bremen/Germany, whose Althaus Tea is now sold in 40 countries.

Nicholas Henderson-Stewart (43), a New Zealand national, who graduated in 1996 from the London School of Economics, became in 2014 Chairman of the Board of Oasis replacing American beer entrepreneur Eugene Kashper, who acquired the same year Pabst Brewing Company based in Los Angeles, California in a partnership with San Francisco–based private equity firm TSG Consumer Partners (inside.beer, 29.12.2016).

 

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