Heineken Fears Russia Could Take Over Operations as It Withdraws From the Country

by Taylor Cunningham
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Heineken worries that if it leaves its factory in Russia, the Kremlin may take over operations and nationalize its brand just as it’s doing to McDonald’s.

Previously, Heineken said it would only pause new investments and exports to the country. But this morning, the company announced that it was selling its Russian business.

In a press release, it said that “ownership of the business in Russia is no longer sustainable nor viable in the current environment. As a result, we have decided to leave Russia.”

The beer giant stands to lose $438 million by making its exit. But it still plans on continuing limited operations in the country for the time being. That decision comes because of fears that President Putin will take over the business as a way of getting revenge.

The Kremlin Plans to ‘Introduce External Management’ to Companies That Leave the Country

Just weeks ago, Putin decided to follow through with a plan that would “introduce external management” to Western companies that leave the country due to the invasion “and then transfer these enterprises to those who want to work.”

And the president has continuously threatened to retaliate against businesses belonging to “unfriendly” countries that are imposing sanctions on Russia. The country has since clarified that the United States and all European Union countries are on the list.

“We aim for an orderly transfer of our business to a new owner in full compliance with international and local laws,” Heineken said. “To ensure the ongoing safety and wellbeing of our employees and to minimize the risk of nationalization, we concluded that it is essential that we continue with the recently reduced operations during this transition period.”

The company also added that it guarantees “the salaries of our 1,800 [Russian] employees will be paid to the end of 2022. And [we] will do our utmost to safeguard their future employment.”

However, once Heineken completes the transfer, it “will no longer have a presence in Russia.”

Heineken Fears ‘Nationalization’ After Russia Copies McDonald’s Trademark

McDonald’s was one such company that pulled out of the country only to be nationalized. Days after closing, local business Uncle Vanya filed for a trademark with a logo almost identical to the golden arches. The logo flips the M onto its side to resemble a B and the color scheme remains the same. Putin is endorsing the bid.

IKEA is another company facing the same issues. After abandoning the country, Russia is threatening to take its patent from Sweden and then change the name to IDEA.

Heineken is one of over 450 Western companies that have left Russia over the Ukraine war. Some of the biggest to leave are Coca-Cola, Apple, and Nike.

Outsider.com