just the Facts – The Belarus beer market

Carlsberg’s Baltic Beverages Holding unit yesterday (15 July) announced that it has increased its stake in Olivaria Brewery, the third largest brewer in Belarus. Here, together with Euromonitor International’s Beer in Belarus report, we take a look at the country’s beer market.

• Beer in Belarus is mainly consumed off-trade, which accounted for around 94% of total volume sales in 2009. On the one hand, local consumers do not perceive beer as a beverage worth drinking in restaurants or bars, so it loses out to wine and spirits. Also, Belarus still has an underdeveloped social culture for going out, and a relatively small number of cafés, bars and restaurants per capita; these have high prices, which shapes consumers’ attitudes.

• Standard lager dominated sales in 2009, accounting for around 94% of total beer volumes. This was predominantly due to the category having the widest variety of products and brands, as well as affordable prices. The highest growth category within standard lager was imported lager, with 34% growth in 2008 and 8% in 2009 in volume terms.

• As of the beginning of 2009, the state retained its hold on the leading brewer, Krinitsa and the fifth largest local beer manufacturer, Brestskoye Pivo. However, the Governement is looking to attract foreign investors for the further development of these two firms. The other four leading beer manufacturers in Belarus – Olivariya, Lidskoe Pivo, Pivovarennaya Kompaniya Syabar and Rechitsa Pivo – already have foreign investors. The most prominent candidate for investing in both companies is SABMiller; its participation in the purchasing of shares of Krinitsa and Brestskoye Pivo was under discussion with the Belarusian government in January 2009, but the final decision was postponed.

• Consumers in Belarus are mainly conservative in their beer preferences. Around 32% of consumers choose known brands; 27% are loyal to the same producer; 6% do not care about brand or producer; 31% admit that they might try something new, and only 4% are actively seeking something new to try. However, new types of beer, such as ‘on ice’ brands or ‘non-filtered’ brands launched on the market in 2008 were reported to have demonstrated increased interest and increased sales.

• Sales of beer in Belarus are expected to grow in both volume and value terms to 2014, despite a poor performance in the first quarter of 2009. Sales of beer are forecast to increase 28.3% (2009-2014), while volume is expected to grow 16%. Domestic lager is expected to remain the most significant category in beer and local authorities are expected to boost this with the start of licensed manufacturing of imported brands.

• New Government legislation, ‘About Advertising’, has changed the advertising landscape in Belarus. Companies are now forbidden to use images of humans or animals, even animated, in beer advertising, with the exception of using images in registered trademarks for beer. This has resulted in companies having to change their advertising. But, despite the new legislation and the economic downturn, leading companies including Olivariya, Syabar, Baltika, Krinitsa, Lidskoe Pivo and Rechitsa Pivo have continued to invest in advertising campaigns.

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