RUSSIA: Budweiser to bolster Anheuser-Busch InBev in Russia

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Anheuser-Busch InBev has reacquired the licence to brew and sell Budweiser lager in Russia as the brewer looks to regain market share by improving its presence in the country's premium beer sector.


Anheuser-Busch InBev has bought back the licence to produce and sell 'Bud' - as the beer is known in Russia due to trademark issues - via its subsidiary in the country, Sun InBev.

The lager has been available in the country since the 1990s and has built a presence in high-end hotels and selected supermarkets, but brand owner Anheuser-Busch (A-B) licensed out production to a third party between 2006 and 2010.

Following InBev's takeover of A-B in late 2008, the newly-merged firm will relaunch Bud in Russia and hopes to get an early boost from the country's inclusion in the FIFA World Cup, which kicks off in South Africa on 11 June. Budweiser is FIFA's official beer sponsor.

The Bud relaunch is part of A-B InBev's plan to improve its presence in Russia's premium beer sector and further build Budweiser as a global brand.

Bud will be priced at between RUB42 (US$1.36) and RUB45 per 0.5-litre bottle, a spokesperson for A-B InBev in the US told just-drinks yesterday (20 May). It will be brewed to the original Budweiser recipe and regular samples will be sent back to A-B's headquarters in the US to check quality.

Marketing support, initially around the FIFA World Cup, will cover all major media channels, as well as point-of-sale materials and outstanding consumer promotions, said A-B InBev. "The campaign will reinforce that the iconic worldwide beer brand has arrived in Russia and has come here to stay," it said.

Sun InBev has struggled against competitors amid a tough time for brewers in Russia over the last 12 months.

The market shrank by 10% in volume in 2009 and, largely due to a three-fold rise in excise tax introduced in January, is expected to decline at a similar rate this year.

Figures from Business Analytica show that Sun InBev lost 2% of volume market share in Russia in 2009, dropping from 19% to 17%. It remains the second largest brewer in Russia, albeit some distance behind Carlsberg.

In the first quarter of 2010, Sun InBev, which also operates in Ukraine, reported volume sales down by 14% and net sales down by 20% to US$244m, compared to the same period of 2009.

Premium beer, in addition to offering higher margins, is considered more insulated from Government measures to curb excess drinking by forcing up alcohol prices.

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