Heineken announced the closure of its 1 million hectoliter brewery in Kaliningrad/Russia by the end of this year. “In the last eight years, the Russian beer market has been steadily declining, which resulted in considerable underutilization of production capacities in the whole sector and in particular in the Kaliningrad brewery”, stated the company in a local press release.
Last year and again the first half of 2016 sales of Heineken beer in Russia decreased by about 8% due to adverse market conditions in Russia. “Sustained inflation, unfavorable exchange rates, low consumer confidence and intense price competition” were the main reasons for the decline named by the company. In addition the political situation makes business harder: Restricted advertising, increase in excise duties and the introduction of EGAIS , the electronic tracking and monitoring system for alcoholic drinks have already resulted in lower beer sales in the country. The ban of beer in plastic bottles in excess of 1.5 l, which becomes effective in 2017, will further impede the business.
The Kaliningrad brewery was established in 1910 and was bought by Heineken in 2005 together with two other Russian breweries in Novotroitsk and Khabarovsk as part of Ivan Taranov Breweries.