RUSSIA: Tax hikes force Anheuser-Busch InBev to close brewery
A-B InBev is being forced to close another of its Russian breweries
Rising alcohol taxes and government regulation has forced Anheuser-Busch InBev's to shutter another one of its breweries in Russia.
The Novocheboksarsk brewery in the Republic of Chuvashia will close and production moved to other sites, the company's subsidiary, Sun InBev, confirmed to just-drinks in a statement today (5 June). It is the second brewery Sun InBev has closed in Russia in the space of a year, following the shutting of its Kursk facility last August.
Following the latest closure, Sun InBev will have seven operational breweries in Russia.
“This is a tough decision that we do not take lightly, but unfortunately we do not see any other option in the current beer market conditions,” Stuart MacFarlane, A-B InBev's zone president for Central & Eastern Europe, said.
The brewer said a combination of a five-fold tax hikes since 2009 and “various legislative restrictions and bans” has made Russian beer industry regulation “one of the toughest in the world".
According to SUN InBev figures, the Russian beer market saw volumes drop by 20% between 2009 to 2012, while in the first quarter of this year beer production fell a further 10%.
The Russian Government banned print media advertising of alcohol on 1 January, an extension of measures introduced last year that outlawed alcohol promotions on television, radio, the internet, public transport and billboards. It has also stopped street kiosks selling beer.
In November, an analyst suggested A-B InBev should cash in on SUN InBev because it was “losing critical mass” in Russia.
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