“We have concluded that Heineken’s ownership of the business in Russia is neither sustainable nor viable in the current environment. It is for this reason that we have decided to leave Russia,” the company said in a statement.
Heineken (HEINY) had already halted new investments and exports to Russia and halted sales, production and promotion of its Heineken-branded beer in the country.
“We are shocked and deeply saddened to see how the war in Ukraine continues to develop and intensify,” the company added.
The Moretti and Amstel brewer said he is aiming to transfer the company to a new owner in compliance with Russian and international laws.
“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 with recently reduced operations during this transition period,” it added.
The brewery said it will pay salaries to its 1,800 employees in Russia until the end of 2022 and will “do our utmost to secure their future employment”.
Heineken expects a loss of 400 million euros ($439 million).
“Once the transfer is complete, Heineken will no longer be present in Russia,” the company said.
The company reported in February that its Russian beer volumes increased by a few percentage points in 2021, reflecting stronger demand for premium brands Heineken, Miller and Dr. Diesel is due. It also reported growth for its market-leading cider business in Russia.
Since the invasion on February 24, dozens of companies from all sectors of the economy have given up or frozen their operations in Russia.
Rival brewer AB InBev (BUD), the maker of Budweiser and other brands, has said it has asked “the majority shareholder” of its Russian operations to suspend the license to produce and sell bud in the country. The company is also forfeiting “any financial benefit” from its joint venture operations. Employees continue to be paid.