Heineken still investing in Russia despite promises to stop
Despite promising to stop investing in Russia after the country invaded Ukraine a year ago, Heineken launched no less than 61 new products on the Russian market last year, Follow the Money (FTM) reports based on an overview of 2022 by Heineken Russia. The Dutch brewer’s Russian subsidiary looks back on “a turbulent year, with many new growth opportunities.”
At the end of March 2022, over a month after Russia started its war in Ukraine, Heineken announced that it was leaving Russia, saying that ownership of the Russian subsidiary was no longer “durable or viable.”
The Dutch beer giant stopped producing Heineken beer in Russia last year, but Amstel’s strong growth largely managed to fill that gap. According to Heineken Russia’s own reports, the brewer launched 61 new products “in record time” and sold 720,000 hectoliters more beer and soft drinks.
“2022 was a turbulent year for all market players, but at the same time, it offered plenty of opportunities and opened up new possibilities for the development and growth of our business,” Heineken Russia said on its website. “We are proud to announce that we have reached record highs in multiple segments.” The company announced even more investments for 2023, including more modern packaging and new flavors.
The development, production, and marketing of new products is usually a costly process. Heineken would not say how much it invested in Russia last year, according to FTM. Heineken also wouldn’t say how much tax it paid to the Russian authorities in 2022. In 2019, it was almost 400 million euros.
A Heineken executive told FTM that he understands the strategy to some extent. “If you want to sell the company, you maximize market share in the short term to increase your value,” he said. “The better they do that, the sooner they find a buyer.”
“But on the other hand - after all our announcements from last year - it is hypocritical,” the executive said. “Heineken is cynically benefiting from the fact that major international brands have withdrawn from Russia - the Budweiser and Carlsberg brands were much bigger there. Heineken fills this gap by investing heavily in its own local and international brands.”
The executive also noted that product launches and aggressive growth plans require heavy investments. “That is in absolute contradiction with the official story about the divestment of our Russian subsidiary,” he said to FTM. He expects that the Russian buyer - like subsidiary owners elsewhere - will pay royalties to Heineken for the use of its international brands.
Last week, Heineken CEO Dolf van den Brink announced that the sale of the Russian subsidiary was more complicated than anticipated, partly due to “changing local legislation” and the company wanting to prevent Heineken Russia from falling into the wrong hands.