Heineken put up for sale mothballed plant in Kaliningrad

Heineken Kaliningrad
Heineken Kaliningrad

Brewing company Heineken has put on sale on sale its plant in Kaliningrad. It has been reported by Reuters citing a company statement. Production at the plant was halted from January 2017, the company attributed this to the complexity of working in Russia in the conditions of economic recession and pressure from the state.

“We soberly assess the economic situation in the country in General and region in particular”, – stated in the last statement.

The company plans to earn not less than 250 million rubles ($4.3 million) from the sale, and the money will be put into other projects in Russia.

By announcing a freeze of production at the Kaliningrad plant “Company pit” almost exactly a year ago, Heineken called the pressure of regulation on the industry the main reason for its decision. They also mentioned a sevenfold increase in the excise tax (20 RUB. per 1 liter of beer in 2016), the prohibition of small forms of trade, restriction of advertising, the introduction of EGAIS. According to the Union of brewers of Russia, from 2008 until Fall of 2016, the production of beer declined by more than 35%. All this has led to higher prices and thus reduction of beer consumption as per company’s opinion. At the same time, Heineken said that over the preceding eight years, Russia was closed 11 major breweries.

Brewing company Heineken closes a third plant in Russia.
The brewers are asking the government not to increase excise.

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