Heineken to close Kaliningrad brewery in Russia

Heineken has confirmed its intention to cease production at its brewery in the Russian province of Kaliningrad. Brewing at what is one of the group's oldest facilities in the country will come to an end at the start of next year, Heineken said. The decision is due to falling demand in the region, as well as growing administration costs imposed on businesses by the Russian Government, the company said in a statement.

Some production equipment will be moved from Kaliningrad, which is separated from the rest of Russia, to other Heineken breweries and bottling plants in the country. The premises will then be used for warehousing.

A spokesman for Heineken Russia said: "Since 2008, the volume of the Russian beer market has been steadily declining, which resulted in a significant underutilisation of production capacity of the entire brewery industry in Russia, and in particular the Kaliningrad brewery."

Founded in 1910, the brewery came under Heineken's control in 2005, when it bought Ivan Taranov Breweries. It has a capacity of around 1m hectolitres per year.

In 2015, Heineken's sales in Russia fell by 8% year-on-year.