The brewing giant behind Budweiser is in talks to cut off supplies of the beer to Russia.
Anheuser-Busch InBev has said it is holding “active discussions” to offload its share of a Russian joint venture with Anadolu Efes, a Turkish partner, and has asked for the suspension of the sale of Bud as part of the deal.
Global ratings agency Fitch downgraded the joint venture AB InBev Efes last month due to the “challenging macroeconomic environment” in Turkey, Russia and Ukraine. AB InBev, the world’s largest brewing company, is set to take a $1.1bn hit on the sale.
AB InBev’s move is the latest decision by a Western brand to exit the Russian market as a result of Vladimir Putin’s invasion of Ukraine. Ikea, McDonald’s and Starbucks have led the exodus from Russian markets, and Russians have also seen supplies of Heineken and Carlsberg cut off.
AB InBev said it was also introducing the Ukrainian beer brand Chernigivske to a number of markets including the UK, Germany, Belgium, France and the Netherlands.
The company said: “All profits from the sale of Chernigivske will go to support humanitarian relief efforts and AB InBev is guaranteeing at least $5m of support from this humanitarian initiative.”
Fitch analysts warned that the finances of the AB InBev joint venture would take a hit after production in Ukraine was halted at the start of the Russian invasion. They also said consumers in both Russia and Turkey will spend less on beer due to currency devaluation, as well as high inflation and rising unemployment.
But they said the company was still able to source raw materials in Russia with minimal supply-chain disruption and would be able to pass on price increases to customers.
The agency said: “The rating action reflects a challenging macroeconomic environment in the company’s two largest markets of Turkey and Russia as well as in Ukraine, and its impact on its current and prospective leverage, which increased at end-2021 to levels that are no longer compatible with the rating.
“A sharply deteriorating trading environment has led us to expect that credit metrics will not return to levels that are consistent with the rating before 2024.”
Fitch also warned that there was a risk Russia could permanently ban the company from paying out dividends to its parent.
