After the uproar: Levi’s production stops in Russia | money

Last summer, it was announced that for the first time Leffe will also be manufactured in seven breweries in Russia. This decision was made by AB InBev-Efes, a joint venture between AB InBev and Turkey’s Anadolu Efes, in which AB InBev does not have a controlling stake. The news caused an uproar, and was even accompanied by calls to boycott Leffe and other AB InBev beers.

AB InBev and Anadolu Efes have been working together since 2018, in Russia, among others. Both companies own 50 percent of the shares in the joint venture, but operationally Efes will make the decisions. This meant a difficult situation for the Belgians.

The multinational beverage company, like other large companies such as McDonald’s, Starbucks or Nike, wants to withdraw from Russia as much as possible. Due to the Russian invasion of Ukraine and the sanctions imposed on the country, AB InBev wants to get rid of its stake in the joint venture.

AB InBev confirmed Monday that the partnership will stop brewing Leffe in Russia. The Belgian company, headquartered in Leuven, reiterates that they have no controlling interest in the joint venture, and therefore do not make a decision on the production lines that Efes will build.

It added that active talks are currently underway regarding the sale of AB InBev’s stake to Turkish brewer Anadolu Efes. Talks are said to have started in April. “While these negotiations continue, production of Leffe in Russia has been suspended,” AB InBev reports. It is not clear why the suspension is now.

According to De Tejd, talks about withdrawing from the partnership do not appear to be going well. She talks about “a Turkish partner that AB InBev can’t seem to get rid of.” “The question arises as to whether Efes is trying to increase pressure by putting AB InBev at a disadvantage by starting to brew one of its best brands in Russia,” the business newspaper analyzes. Wartime “is now coming to an end”, it seems in any case.

AB InBev waives all financial benefits in the joint venture. “Consequently, AB InBev will not recognize its investment in AB InBev Efes on its balance sheet and will report a $1.1 billion decline in associates results in its first-quarter results announcement.”