Business

Heineken fears that Russia will take over the business if it leaves the country

Heineken on Monday expressed concern that the Kremlin could try to take over its local operations as it attempts to leave Russia after invading Ukraine.

The Dutch beer giant plans to sell its business in Russia after a strategic review concluded it was “no longer sustainable and viable in the current environment”.

However, Heineken will maintain limited operations in Russia amid fears that Russian President Vladimir Putin could nationalize the business in retaliation.

“We are seeking an orderly transfer of our business to a new owner in full compliance with international and local laws,” Heineken said in a statement. “To ensure the continued safety and well-being of our employees and to minimize the risk of nationalization, we have concluded that it is important that we continue recently reduced operations during this transition period.”

Heineken issued its warning weeks after Putin backed a plan to “introduce external management” for Western companies leaving Russia in response to the invasion “and then transfer those companies to those who want to work.”

Heineken bottling plant
Heineken said it would continue limited operations in Russia to minimize the risk of nationalization.
Bloomberg via Getty Images

The Kremlin has repeatedly threatened retaliation against companies from “unfriendly” countries involved in an economic crackdown on Russia.

Heineken previously announced that it would stop sales, advertising and production in Russia, as well as all new investments and exports to the country.

The company said it will “not benefit from an ownership transfer” of its Russia operations and expects an “impairment charge” of about 0.4 billion euros (about $440 million) related to the exit.

Heineken factory in Russia
Heineken said its business in Russia was “no longer sustainable”.
Bloomberg via Getty Images

“Under all circumstances, we guarantee that the salaries of our 1,800 employees will be paid until the end of 2022 and will do our utmost to secure their future employment,” added company officials.

More than 400 Western companies have already left Russia because of the Ukraine war, with many citing operational difficulties or a moral objection to the war as triggers for their decisions.

McDonald’s was one of the companies that paused sales in Russia. Within days of the fast-food chain’s decision, a local operator named Uncle Vanya filed a trademark application with a logo almost identical to McDonald’s golden arches. Russian officials have approved the takeover bid.

https://nypost.com/2022/03/28/heineken-fears-russia-will-take-over-business-as-it-leaves-country/ Heineken fears that Russia will take over the business if it leaves the country

DUSTIN JONES

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