A-B InBev has no plans to exit Russia

A-B InBev has no plans to exit Russia

Anheuser-Busch InBev intends to remain in Russia despite its struggling beer market, but the brewer's CEO has admitted it will take “years” to return to pre-2008 growth in the country.

Earlier today (31 October), the Budweiser brewer reported that its third-quarter beer volumes in Russia fell by 13.4%, while year-to-date volumes were down 13.2%. Since 2008, the country's beer market has been hit by the economic downturn, tax rises and new laws on selling and advertising beer

In an analysts' conference call today, CEO Carlos Brito rejected any suggestion that the firm may exit the region. “We are there to stay,” he said. “It's one of the top five markets in the world in terms of volume. We want to be present because we have investment there, premiumisation is taking place there and we have the brands.” 

But, he warned: “It will take some years for us to see what we saw before 2008 there.”  

He added: “We have to shift our resources around to come up with a new strategy, which will take some time to pay off.” 

Brito suggested that A-B InBev's newly-acquired Corona brand could be launched in the region. Asked it it could play a role in Russia, he said: “Yes, of course that's part of the premimisation strategy.”

Nomura analyst Ian Shackleton last year suggested the brewer may decide to sell its Russian business, SUN InBev, as it makes up just 2% of the company's profits.

Carlsberg is the market leader in Russia, with around 37% share, followed by the Efes/SABMiller tie-up on about 16%. SUN InBev has around 15% share, followed by Heineken with 13%.

Meanwhile, Brito refuted a suggestion that cost-savings was the reason behind the company's plans to merge its Western Europe and Central & Eastern Europe businesses. “That's not the main opportunity,” he said. Instead, the move is intended to “reduce complexity and improve efficiency” as both regions face similar issues, with slowing growth and an increased focus on premiumisation.