Russia: Heineken to sell mothballed Kaliningrad plant

Heineken is putting its mothballed Kaliningrad plant up for sale, Reuters reported on Monday. The sale is expected to raise at least 250 million roubles ($4.3 million).

In October 2016, the Dutch brewer announced to close its one million hectoliter brewery in the Russian enclave of Kaliningrad by the end of last year (, 14.10.2016) The decision to close the brewery was "a forced measure" and was taken after an analysis of Russia's beer market which has been in decline for the past eight years, Heineken said.

In the context of closing the Kaliningrad plant Heineken CEO Jean-Francois van Boxmeer was quoted as saying: "It's a market that is going down. I think one day the Russian market will grow better ...the only thing is, I don't know when."

The brewery was established in 1910 in Königsberg, as the German city was named at that time. The city is located on the Baltic Sea and was the easternmost large settlement in Germany until World War II, when the Soviet Union captured and occupied the city and expelled the German population. The city was repopulated with Russians and renamed Kaliningrad. Since 2004, when Poland and Lithuania joined the European Union (EU), Kaliningrad is totally surrounded by EU member states.

After 1945 the brewery was nationalized and changed its name from Königsberger Brauerei to Kaliningradskij Pivsavod. In 1998 Detroit Brewing Co., a group of foreign investors, purchased the brewery and joined it with two other Russian breweries in Novotroitsk and Khabarovsk to form the new group Ivan Taranov Breweries. The group was sold in 2005 to Heineken.

As reason for the sale, Heineken said on Monday it had “a sober estimate of the economic situation in the country as a whole and in the region in particular.”

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