E-Malt.com News article: 2202

Russia: Beer sales for the Baltika Brewing Company, Russia's leading brewery, rose slightly last year. In 2003, Baltika sold 16.17 million hectolitres of beer, 0.7% more than in 2002 when it sold 16.06 million hl. In a press release, the company said that both domestic and exported sales rose last year, totalling 15.17 million and 1 million hectolitres respectively.

The company's market share slipped by 1.3 percentage points in 2003 to 20.7% due to stronger competition and the longer period required to restructure the distribution network at a time when Baltika was looking for new marketing solutions. The network restructuring was complicated by the broad geographical diversity of Baltika's sales, however the company still managed to prevent sales from decreasing.

Baltika had successfully completed a restructure of its sales and distribution system without the drop in sales usually associated with such changes at major companies, the company said in a statement. Last week, Baltika’s controlling stakeholder Baltic Beverages Holding posted full year figures showing increased volumes but sales and EBITDA hit by increased investments in brewing and distribution infrastructure, and the negative impact of currency. In euros, net sales for the year to 31 December 2003 fell by 6% to €1.16 billion, while for Q4 net sales rose by 6% to €245m. In dollars, however, net sales for the year rose by 13% to US$1.3 billion, and for Q4 increased by 27% to $291m.

Baltika has sufficient competitive advantages for its business to grow. Business growth rests to a considerable extent on Baltika's ability to improve its marketing strategy and successfully finish the job of restructuring its distribution network - the industry's biggest - which the company began in 2002. The company's name and umbrella brand are widely-known, and thanks to the diversity of its brand portfolio, Baltika is present on nearly all of the market's price segments - from brewing under license to low-cost beer.

The fact that Baltika is controlled by the BBH holding company, owned by Carlsberg and Scottish & Newcastle, which are among the world's top ten world brewers, is a rating driver. BBH controls more than a third of the Russian market, and Baltika is the holding company's key asset.


18 February, 2004