Heineken in Russia: profit vs purpose

06 March 2023

Heineken in Rusland: profit vs purpose

Beer brand Heineken is under heavy fire in the Netherlands. Last year, the brand led the way in announcing that it would leave Russia after the invasion of Ukraine. Still, it launched 61 new drinks. An example of the unbearable division between "purpose" and "profit". Or how economic interests achieve social goals. With reputational damage as a result.

After Putin's invasion of Ukraine, the Dutch brewers' group was one of the very first international companies to announce that it would leave Russia by the end of 2022. There were higher values at stake than turnover and profit, it sounded wholeheartedly. But at the beginning of February this year, Heineken had to reluctantly confess that leaving the country was not self-evident, because the Russian government had introduced all kinds of rules that made such a thing more difficult for foreign companies.

Last week, however, research platform Follow The Money revealed that Heineken had no intention of winding down its Russian trade at all, in fact, that it introduced no fewer than 61 new products to the Russian market last year, on top of the 35 products it sold there before the war in Ukraine. The Russian branch of Heineken also appeared to be very proud of this in a press release.
The brewer immediately received a wave of criticism in its home country: from the Dutch Minister of Foreign Affairs to the Association of Investors. The minister found the brewery giant's alleged Russian investments "morally inexplicable." The investors' association labelled Heineken's limping crisis communication as 'cowardly swagger'.

Asked for a response by De Standaard last week, it seems to me that Heineken has ventured into a far too large spread between 'purpose' and 'profit'. 'As a company, you can't wave the index finger if it turns out that you don't do enough yourself to put your money where your mouth is.' This is an example of what has previously been described in academic literature as 'corporate hypocrisy'.
Heineken should also have known that attitudes towards Russia in the Netherlands have been very sensitive since a passenger plane was shot down over Ukraine in 2014, killing 192 Dutch people. 'The question Heineken is now facing in the Netherlands is: which side are you actually on?'

Painful conclusion: in a war, a brand cannot eat from two wallets. Honesty and transparency are crucial. More than ever, it's a matter of: saying what you do, and doing what you say. It can be as simple as that. But not for Heineken.

This 'view' is partly based on the article published in De Standaard on 27 March 2023 by Pascal Sertyn.