The leading Russian brewer, Baltika, has said that it partially agrees with proposals put forward by the Belarussian government regarding the privatisation of the Krinitsa brewery, but is still waiting for a further response from the government.

Baltika president, Taymuraz Bolloev, said that it received the proposals from the government in August and, agreeing to some of the terms, submitted counter proposals shortly after. It is now waiting for the government's response.

The draft investment project to privatize Krinitsa proposed by the government allows for the immediate transfer of a controlling 51% stake in Krinitsa to Baltika upon completion of various conditions. While Baltika has agreed to the transfer of certain of its assets to the Belarussian government, it has balked at some of the conditions, including the financing of the construction of an ice rink.

While communication has been re-established between the government and Baltika, litigation begun by Baltika earlier in the year is still continuing. In August, the Minsk Appeals Court recognised a ruling from the International Commercial Arbitration Court at the Russian Chamber of Commerce and Industry (ICAC) upholding a Baltika lawsuit against Krinitsa. A further three lawsuits have been filed by Baltika and will be heard in September.

The first phase of the redevelopment of the brewery was originally scheduled to have been completed by April 2002 but Baltika suspended re-development work in the summer of 2001 after the Belarussian government's failure to issue a ruling on the transfer of the agreed controlling interest. In February, Baltika launched legal proceedings in its bid to recover a US$10m investment it made in the brewery which was to be the first phase of a $50m investment in return for a 50%-plus share in the concern. The government owns 80.57% of Krinitsa while the remaining 19.41% is in the hands of the employees.