Heineken has finally completed its pullout from the Russian market, but it did so at a steep cost.
The brewer on Friday announced it had completed the sale of its seven breweries in the country to Arnest Group for roughly $1, less than the retail price of one of its beers.
The symbolic transaction will cost the company $324 million, but it hopes to gain some corporate goodwill. The Dutch parent company of Heineken says it has been attempting to leave the country since March 2022, when Western sanctions fell into place due to Russia’s invasion of Ukraine. The slow pace of that exit made Heineken a target for criticism.
“We have now completed our exit from Russia,” said Dolf van den Brink, Heineken CEO and chairman, in a statement. “Recent developments demonstrate the significant challenges faced by large manufacturing companies in exiting Russia. While it took much longer than we had hoped, this transaction secures the livelihoods of our employees and allows us to exit the country in a responsible manner.”
The sale will protect the company’s 1,800 former workers in Russia, as Arnest Group, which generally specializes in cosmetics and packaging, has guaranteed their employment for the next three years.
Heineken beer was removed from the country last year—and production of its Amstel brand in Russia is expected to be phased out within six months, Heineken said.
The sale will not impact the company’s fiscal guidance.
While many major brands pulled out of the Russian market, some liquor brands have stayed put. Bacardi, for instance, imported $169 million worth of its rum, Grey Goose vodka, and other spirits in the 12 months ending June 30—and the company is also looking to hire additional staff in the market. Davide Campari-Milano, maker of Wild Turkey bourbon and Appleton Estate rum, has also continued imports to the country. And tea and coffee maker JDE Peets has remained in Russia as well.
Another brewer, Carlsberg, had hoped to sell its Russian operations, but the government took over the business there instead.
This story was originally featured on Fortune.com
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