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RUSSIA: Carlsberg Baltika Breweries cuts dividend, upbeat on 2011

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Carlsberg's Baltika Breweries has chopped its annual shareholder dividend by around two thirds, as figures show that Russia's beer consumption has been set back by five years.

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Baltika's shareholders this week approved an annual dividend of RUB42 (US$1.49) per share for 2010, down by around 66% on the RUB128 per share dividend paid for 2009.

The reduced dividend follows a tough year for brewers in Russia, which has seen beer sales hit by an economic slowdown and a three-fold rise in duty tax. Baltika's figures show that Russia's beer market has regressed to volume levels of five years ago, with overall market sales of 94m hectolitres in 2010.

However, Baltika maintained its volume market share during 2010, at close to 40%, and the group's owner, Carlsberg, is confident that the market can bounce back.

Earlier this year, Carlsberg's CEO, Jørgen Buhl Rasmussen, said in an exclusive interview with just-drinks that he was "extremely optimistic" about Russia. "Russia's per capita consumption has gone from 80 litres in 2008 to 66 litres, which is below the European average. It's hard to believe that Russia would not come up to at least the European average," he said.

There is a sense among the country's brewers that, following last year's beer tax hike, the government's drive to reduce alcohol harm is now more focussed on hard spirits.

In an interview with Reuters, published yesterday (16 June), Buhl Rasmussen predicted that Russia's beer market will expand by between 3% and 5% in volume over the next three to five years.

Russia remains the fourth largest beer market in the world, behind Brazil, the US and China, according to Baltika.

In April, the brewer announced that it would buy back up to 5% of its issued share capital for a maximum RUB11.5bn between 1 June 2011 and 22 July 2012, in order to deliver a better return to investors.


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