Ukraine’s U.N. Ambassador Reflects on the Year of War
The ambassador of Ukraine to the United Nations provides insights into Russia’s invasion, the implementation of sanctions, and China’s role during this tumultuous period.
At present, Heineken has finalized the sale of its business in Russia for a symbolic one euro. This decision comes over a year after the company pledged to withdraw from the country as a response to Russia’s invasion of Ukraine. The Dutch brewing company is incurring a substantial loss of €300 million ($325 million) by transferring its business to Russian manufacturer Arnest Group. This move adds Heineken to the growing list of companies that have chosen to exit the Russian market since the outbreak of the war in Ukraine in February 2022.
Heineken has faced criticism for the delay in its departure, which is attributed by CEO Dolf van den Brink to the company’s efforts to safeguard the livelihoods of its Russian employees during the sale process. In a statement released on Friday, he stated, “While the process took longer than anticipated, this transaction ensures the well-being of our employees and allows us to exit the country in a responsible manner.”
According to data from Yale University, over 1,000 global companies have already withdrawn or reduced their operations in Russia. The challenges associated with leaving the country have proven to be more complex than initially expected. Moscow has implemented increasingly stringent requirements for foreign businesses wishing to exit due to the imposition of tough sanctions and the growing trend of companies leaving.
Foreign companies are now compelled to subject their businesses to valuation by government-selected consultants and contribute 10% of the sale price to the Russian budget in order to satisfy government regulations. Heineken’s divestment includes the entirety of its assets in Russia, including its seven breweries. The company has assured that Arnest will guarantee the employment of Heineken’s 1,800 local staff members for a duration of three years.
The Russian market bid farewell to Heineken’s brand of beer last year, while another major brand, Amstel, will be phased out within the next six months, as announced by the company.
Heineken is not the only organization encountering substantial losses as a result of its departure from the Russian market. McDonald’s estimated a loss of over $1 billion as it divested from its Russian operations last year.
As part of the BRICS Summit currently underway in Johannesburg, it is notable that Russian President Vladimir Putin is absent from the proceedings.
It is essential to recognize the challenges and complexities involved in leaving the Russian market, as demonstrated by Heineken’s experience. Nevertheless, numerous companies have made the difficult decision to withdraw or scale back their operations in the face of ongoing circumstances. As this situation continues, it will be interesting to observe China’s role and impact in the region.
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