Netherlands/Russia: Heineken admits misleading information regarding exit from Russia

Heineken admitted today that some of its information regarding its exit of the Russian market was misleading. Despite its promise to leave the market, Heineken Russia with approval of the head office in Amsterdam has launched last year several new products, including new varieties of its international brand Amstel. In addition the company also hired new personnel instead of downsizing the business.

“We should’ve been clearer from the outset that the business in Russia would need to introduce new local products in order to avoid bankruptcy after brand Heineken® and two other large international brands [namely Guinness and Miller] were removed from the market at the start of the war,” the Dutch company explained in a list of 19 Questions & Answers on its website. “We realize this has created ambiguity and doubt about our promise to leave Russia. For this we apologize,” Heineken said.

Heineken explained that “the Russian operations, led by the local management team, are focused on business continuity and solvency (ability to continue to take care of employees, pay salaries, pay suppliers etc.) bridging to the moment of the transfer of ownership.”

But besides that “we have been clear from the outset that we do not profit from the ongoing operations and will not profit from the transfer of ownership. […] There are no royalties received for any brands since March 2022, and there will be no royalties in the future.”

Heineken also admitted that instead of downsizing the business, the company hired 243 new employees in 2022, a net increase of 20 from the previous year. “New hires were needed to keep the business operational due to employees leaving and to undertake tasks that were previously done at the global headquarters but now must be done locally in preparation for transfer to a new owner,” Heineken said.

Heineken also said that, contrary to what was previously stated, the Russian business has not yet been decoupled. "We’re now moving into the next phase wherein we are decoupling the Russia business to enable them to run independently of Heineken in preparation for the transfer to a new owner,” Heineken said. “The only support provided going forward is in disconnecting Russia from the Heineken Group and preparing for transfer,” the statement goes on. This implies that the “decoupling” has not yet taken place and has taken more time than previously anticipated.

“Despite all of this, and while frustrating that it is taking so long, we remain fully committed to leaving Russia. […] Our main focus right now is exiting Russia responsibly and as soon as possible. […] We remain confident that we will reach an agreement in the first half of 2023 followed by required Russian authority approvals,” Heineken concludes.

Heineken Breweries LLC is the Russian division of the Heineken N.V. The company has been operating on the Russian market since February 2002 when it acquired its first brewery in Saint Petersburg. Today it operates 7 breweries and 2 malting plants across 8 time zones and is the third largest brewer in the country.

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