Baltika "fit" to face market challenges

Baltika "fit" to face market challenges

The president of Russia's largest brewer, Baltika Breweries, has said that he is confident of riding out higher taxes and tougher regulation on the country's beer market.

Baltika is "fit to face any challenge", group president Anton Artemiev told shareholders at the brewer's annual general meeting on Friday (9 April).

Baltika owner Carlsberg has predicted that Russia's beer market will shrink by 10% in volume in 2010, primarily due to a three-fold tax rise on beer introduced in January. The market also fell by 10% in 2009, slipping back to consumption levels of 2006.

Tougher restrictions on alcohol sales and marketing have been proposed by the Government, alongside the new tax rate.

"2010 promises to be a challenge," said Artemiev. "We are prepared for a variety of development scenarios."

But, he added: "I am sure that in the future the market will stabilise and restart its growth."

Despite reporting volume sales down 6% in 2009, Baltika gained 1.8% market share in the year, taking its volume share of the Russian beer market to more than 40%.

Figures published by Baltika suggest that it gained share from Sun InBev, the division of Anheuser-Busch InBev. Sun InBev, the second largest player, saw its share fall from 19% to 17% in 2009, according to the figures, which were supplied by research group Business Analytica.

Cost savings in procurement and supply chain also helped Baltika to increase operating profits by 31% to RUB29.6bn (US$1bn) in 2009, compared to RUB22.3bn in 2008. Operating profit margins rose by 7.5 percentage points.

Net sales rose by 1.3% to RUB93.6bn, while net profits leapt by 50% to RUB23.4bn.