Carlsberg and Heineken, the # 1 and 3 in the Russian beer marketboth announced yesterday to halt operations in Russia over Putin's war in Ukraine. They are the latest to join many other Western companies like The Coca-Cola Company, Pepsi, Starbucks, Apple, The Walt Disney Company, Nintendo, Mac Donald’s, Burger King, KFC, Goldman Sachs, just to name a few, that already pulled the plug on their business in the country.
However, AB InBev is less clear about its position. The world’s leading brewer that has since 2017 a joint operation with Turkish brewer Efes in Russia and Ukraine (inside.beer, 9.8.2017) said it is “focused on providing critical assistance to our 1,800 colleagues in Ukraine and their families including providing housing and financial support,” while the company is also “working in partnership with other CPGs and international NGOs to provide food, blankets, medical supplies and two million cans of emergency drinking water to the Ukraine and surrounding refugee relieve areas.”
When asked if AB InBev withdraws from Russia, a spokesperson referred the question to its Turkish partner, who did not immediately answer the question.
Meanwhile Russian officials threatened to nationalize the businesses and production facilities of those companies that leave the country. The companies would "practically leave their collectives to their fate," said former Russian President Dmitry Medvedev who acts Deputy Chairman of the Security Council of the Russian Federation.“The Russian government is therefore working on steps to initiate bankruptcy of the companies and then nationalization of the property,” said Medvedev.
“We stand alongside the Ukrainian people and people around the world in condemning the Russian invasion in the strongest possible terms. We are fully committed to adhering to all relevant sanctions rightly imposed by the European Union and other international bodies,” said Carlsberg in a press release on Wednesday.
“Last week, we announced that there would be no new investments or exports from Carlsberg Group into Russia. [inside.beer, 24.2.2022] Since then, we have ceased all advertising by both the Carlsberg Group and Baltika Breweries in Russia, and we will stop producing and selling our flagship brand, Carlsberg, in the Russian market. Baltika Breweries will be run as a separate business, with the purpose of sustaining our employees and their families,” the announcement continues.
Carlsberg has been owner of Baltika Breweries since 2000 and majority owner since 2008. The 8,400 employees in Baltika represent more than one in every five of Carlsberg’s total global workforce.
Last year, Russia and Ukraine accounted for approximately 13% of group revenue and approximately 9% of the operating profit from Carlsberg’s three regions.
“During the humanitarian crisis,” Carlsberg said, “we are committing that any profits generated by the business in Russia will be donated to relief organizations. Already earlier, Carlsberg group together with the Carlsberg Foundations donated EUR 10 million to support humanitarian efforts in Ukraine.
Heineken also said on Wednesday to stop the production, advertising and sale of the Heineken brand in Russia. “We will take immediate steps to ring-fence our Russian business from the wider Heineken Company to stop the flow of monies, royalties and dividends out of Russia. Heineken will no longer accept any financial benefit derived from our Russian operations. This is in addition to the earlier announced stop on all investments and exports to Russia,” Dolf van den Brink, CEO of Heineken said in a statement.
“We are assessing the strategic options for the future of our Russian operations. We see a clear distinction between the actions of the Government and our employees in Russia.,” the statement continued.
Update 11.03.2022:
AB InBev anounced today:
"We have a joint venture in Ukraine and Russia with Turkish brewer Anadolu Efes. Yet, we do not have a controlling stake at the joint venture and do not consolidate it in our accounts. We have requested the controlling shareholder to suspend the license for the production and sale of Bud in Russia. Furthermore, we are forfeiting all financial benefit from the joint venture operations.
The joint venture employees in Ukraine and Russia will continue to be supported and paid. We are focused on supporting our employees, their families and the humanitarian relief efforts in Ukraine while wishing for peace."
