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Russia: Global brewing giant SABMiller Plc has jumped to the number two spot among premium brewers in the fast-growing Russian beer market by focusing solely on top-of-the-market beers, the group said on June 30. The world's second-biggest brewer which makes Miller Lite, Castle and Peroni beers, has made it to second spot in the premium sector, accounting for a quarter of Russian beer sold, while only ranking No. 7 overall in Russia, Reuters revealed.

Although the Russian beer market is the fifth largest in the world and along with China one of the fastest growing, SABMiller is cautious about immediate takeovers to boost its relatively low 3-4 % share of the beer market. "We continue to assess merger and acquisition opportunities, but we will not rush out and buy something," Alan Clark, managing director of SABMiller Europe, told a briefing at the London-based group's headquarters.

Last month, SABMiller lost out to rival Anheuser-Busch Cos in the battle for China's Harbin Brewery as both squared up to try and win a bigger share of the world's biggest beer market, which is followed in size by the U.S., Germany, Brazil and Russia.

Clark said the Russian market is polarising with growth in the premium sector and the low-priced segment coming at the expense of mainstream brands, and local players, which might be seen as acquisition targets, are focusing on economy beers. "Consolidation will happen, but international players are a bit reluctant and we are comfortable with the lack of consolidation," Clark said.

SABMiller moved into Russia in the late 1990s and built a brewery at Kaluga, 180 kilometres southwest of Moscow to produce local brands Zolotaya Botchka and Tri Bogatyria and its international brews Miller Genuine Draft and Pilsner Urquell.

The premium sector, priced 20 % above mainstream brands in Russia, is set to grow at around 10-15 percent per year while the overall beer market is expected to grow around seven percent annually, Clark added. The nearly 150 million Russians drink an average of 51 litres of beer per person annually, which is expected to rise as it lags well behind Germany and the Czech Republic, at over 100 litres, and Poland at 74 litres.

SABMiller's share of this premium market rose to 17 percent in the year to the end of March from 12 percent before, second behind Baltic Beverages Holding (BBH) at 30 percent but ahead of Turkey's Efes at 16 percent and Sun Interbrew at 15 percent. "Our business is focused on the premium end, we have no mainstream stream brands and no economy brands and no immediate plans to brew any," Clark said.

BBH, owned 50-50 by Britain's Scottish & Newcastle Plc and Denmark's Carlsberg and which sells Russia's top beer brand Baltika, has a leading 33 percent market share of the Russian market ahead of Sun Interbrew with 15.3 percent.

Two Russian private players Ochakovo and Krasny Vostok are third and fourth followed by Heineken, which bought Bravo in 2001, and then Efes and SABMiller.


02 July, 2004