Russia: AB InBev-Efes suspends production of Leffe beer in Russia
Hailed as one of the few Belgian companies that had fully withdrawn from the Russian market after its invasion of Ukraine, selling off its stakes in joint ventures and suspending the use of its licence, brewer AB InBev found itself in hot water in August when it was reported that its Turkish venture partner had resumed brewing in the Russian market, The Brussels Times reported on October 1.
Now, after several months of brewing for the Russian market, production will once again be halted in the sanctioned country RTBF reports. AB InBev's Turkish partner announced that it would be suspending its activities while negotiations continue concerning the sale of the stake not controlled by AB InBev in the joint venture.
In mid-September, cans of Dinant beer Leffe were spotted on supermarket shelves in Russia with markings on the back indicating that the beer had been produced in one of three sites in Russia, namely the cities of Klin, Ivanon, and Ulyanovk. According to RTBF, AB InBev-Efes operated seven factories used to produce Leffe beer.
While the surprising appearance of Belgian beer cans on Russian shelves disappointed many commentators, it is now estimated that brewing of the beer may have only lasted several weeks. Long before AB InBev-Efes announcement that it had halted production, Russian state media stated that production had halted before 21 September.
AB InBev-Efes announcement follows weeks of uncertainty surrounding Russias future and the fate of the companys joint entities in the market. AB InBev, which has no say in the Russian operations, wants to sell its stake in the venture to its partner, Turkish brewer Anadolu Efes. Yet a month later, negotiations between the two partners are still underway.
AB InBev has renounced any financial benefit from its operations of the joint venture in the Russian market and reduced the size of its investment from 1.1 billion to zero, according to a company spokesperson.
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