Baltic Beverages Holding (BBH) has today announced a rise in third quarter sales by 1% as Russian beer growth looks to be slowing down. The company, owned jointly by Scottish and Newcastle and Carlsberg Breweries, enjoyed sales for Q3 of €364m. Operating profit was up by 3% at €109m.


BBH, a majority shareholder in Russia’s biggest brewer Baltika, said it anticipates its volumes to outpace the overall market and sees an 8% volume rise compared with its nine-month growth of 7%.


In a statement, S&N said that third quarter, despite cold summer weather, showed a continuation of the good volume trends established in the second quarter, both within BBH and for the markets as a whole.


In the third quarter, BBH’s market share in Russia grew by 1.5% to 33.1% compared to the third quarter of 2002. For the nine month period January to September market share was 0.9% points higher at 33.3%.


But S&N today warned that the Russian beer market will not grow as fast as expected in 2003. The brewer blames the coldest Russian winter for 40 years for holding back volume growth in Q3. S&N said it now expects Russian beer market volumes to grow at just 5%, not the 7-9% growth it had hoped for earlier in the year.


In the Ukraine, capacity constraints eased in the third quarter allowing BBH to recover market share. For the third quarter, BBH’s share, including Baltika imports was 21.4%, 1.1% points higher than in the previous year. On the same basis for the nine months to September market share grew to 21.4%, 0.9% points higher than in the previous year. The new brewery in Kiev, due to open in spring 2004, will add momentum to this good performance.

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In the Baltics, the company said that high levels of competitor activity in the low value PET sector led to slight market share loss in the third quarter: 0.7% points to 45.3%. For the nine months to September market share is level at 44.8%


BBH operates in six eastern European markets – Russia, Ukraine, Kazakhstan and the three Baltic states. It accounts for nearly 30% of S&N’s annual earnings.