jflPI
BRAU UNION benefits from the EU enlargement in
countries such as Poland, Hungary, Slovakia and the
Czech Republic. The rise of the purchasing power in
MM
these countries also influences the demand for high
quality products
First steps
Latest acquisitions
Strong number three
AUGUST 2005
Having had export operations in Russia since the early eighties, Heineken
took the first step towards achieving a broad market position with the
acquisition of Bravo International in 2002. In addition to a number of well-
positioned local mainstream brands, Heineken got a brewery which offered
the possibility of brewing its iconic beer locally. Since Russia had (and still
has) very high import duties, the acquisition gave the Heineken brand a
competitive advantage in the Russian premium market.
Since then, acquisitions have extended Heineken's presence,
participation and geographical spread of production facilities in the fastest
growing regions in Russia. Last year's acquisition of the Shikhan and Volga
Breweries fits in Heineken's growth strategy for Russia. The Shikhan
Brewery is in Bashkortostan in the southeast Volga region and has a
production capacity of 1.4 million hectolitres for the production of three
local beer brands and soft drinks. The Volga Brewery is in Nizhny Novgrod,
in the northwest of the Volga region. It has a production capacity of 0.8
million hectolitres, serving the local market with three beer brands. Both
breweries are being upgraded to increase production capacity further in
an effort to meet rising demand.
Famous Irish stout Guinness will start being brewed in Russia for the
first time at Heineken Brewery LLC's St. Petersburg brewery (that already
brews Heineken and Miller brands under license) at the start of this
summer. Guinness Foreign Extra Stout (and Kilkenny bitter) will be made
available to consumers in 0.5 litre cans and bottles by the end of this year.
Distribution, sales and marketing of draught Guinness will continue to
be imported from Guinness Ireland. "Currently, there are too few outlets for
the draught beer in Russia to make the more complicated draught brewing
technologies financially viable," said Anna Meleshina, Heineken Russia's
press officer.
In May this year, Heineken signed an agreement to acquire the Patra
brewery in the third largest city in Russia, Yekaterinburg, situated in the
fast growing Urals region, which accounts for 17% of the total beer market
Russia. In July, Heineken acquired the Stepan Razin and Baikal breweries,
acquisitions that fit perfectly in with Heineken's strategy of selectively
acquiring value-creating assets in growth markets.
Following these acquisitions, Heineken in Russia holds a portfolio of the
international and national brands Heineken, Buckler, Bochkarev, Ohota,
Löwenbrau (brewed under license), Draught Guinness and Kilkenny and the
regional brands Shikhan, Sedoy Ural, Solyanaya Pristan, Okskoye, Volga,
Rusich, Sobol, Patra, Strelets and Zhigulevskoye.
Together they bring Heineken's market share in Russia to 10.6%, with
volumes over 8.5 million hectolitres, strengthening its number three
position.
Ten years ago, Russian beer was of very poor quality but with the
introduction of foreign brands manufacturing under license and
investment, Russian beer now has a very good reputation in terms of
quality and price. Which is great for the many people in this polarised
society who find it too expensive to buy alcohol in restaurants and bars;
the retail sector is fast developing in Moscow and the regions, and around
30% of the beer bought in Russia is consumed immediately.
