February 6, 2023

Taylor Daily Press

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AB InBev says goodbye to Russia, which is costing the company $1.1 billion

AB InBev says goodbye to Russia, which is costing the company $1.1 billion

The world’s largest brewery withdraws from Russia. It sells its shares to the Turkish company Anadolu Efes.

Leuven brewer plans to sell its stake in Russia’s AB InBev Efes joint venture. The intention is to sell the 24 percent stake to Turkish beer producer Anadolu Efes, which already owns the majority of the Russian company.

With this decision, AB InBev responds to the massive withdrawal of Western companies from Russia. After the invasion of Ukraine and subsequent sanctions by the West, many companies voluntarily joined efforts to drain the Russian economy. McDonald’s closed all its restaurants and Renault liquidated its stake in the Lada AvtoVAZ product. AB InBev has been cautious about its plans in Russia for a long time, but has now backtracked. However, the brewery has already decided to waive all financial benefits from Russian activities.

The decision is not without financial consequences. The company said in a statement that it will achieve a capital loss of $1.1 billion (1 billion euros). This will affect results in the first quarter. Investments in Russia were removed from the balance sheet. The company will not disclose the expected sale proceeds of Anadolu Efes. But an appropriate price seems out of the question, given the circumstances. The Russian economy has been hit hard. Additionally, Bud’s brewing license revocation will remain in effect. Thus, this successful American beer brand will not be able to sell Anadolu Efes on the Russian market in the future, which will affect the selling price.

According to the annual report for 2021, the Russian subsidiary got rid of losses in Russia last year. It made a small profit of $1 million that year from $1.4 billion in sales.

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Ukrainian workers get support

AB InBev Efes has activities not only in Russia, but also in Ukraine. The company assures that Ukrainian employees can continue to count on the support of the brewery in Leuven. Support is provided to displaced workers and their families. It concerns financial support, housing and moral assistance. There is also cooperation with NGOs and aid organization Caritas International.

The profit from the sale of Chernigivske, the most popular beer brand in Ukraine, will go to humanitarian works. It comes to at least $5 million (4.6 million euros). Chernigivske is also on sale in Belgium and many other countries in Europe and Latin America.

AB InBev Efes has eleven breweries, three maisonettes in Russia and three breweries in Ukraine. The latter are located in Chernihiv, Kharkov and Nikolaev.