Many would like to operate in Russia, but it is not simple to do so; most of the Russian market is already divided between leading foreign players. Now the battle for a place under the Russian sun has entered a new phase: overseas companies are creating strategic alliances, buying out Russian assets from one another and even enlisting Russian officials' support to gain control over resisting producers.
According to the Russian Statistics Committee (Rosstat), Russia sold 998.2 million decaliters of beer last year, in a market estimated at $16 billion. This year the trading continues to increase. In the first six months it posted a growth of 30%. Specialists are confident that there is still potential for growth because the average Russian consumes only 70 liters of beer a year, while Europeans consume 80 to 85 liters.
Many would like to work in such a market, but it is not an easy task. The consolidation process is over. The five largest companies - Baltika, SUN InBev, Heineken, Efes and SABMiller - control more than 85% of the Russian market. Other international producers are therefore looking for ways to grab their rivals' Russian assets.
Denmark's Carlsberg likes doing business in Russia. In 2002, it became the owner of a 50% stake in Baltic Beverages Holding (BBH), the main owner of the Baltika brewery company and leader of the Russian market.
But it looks as though the Danish are not satisfied with the half they have and are racking their brains about how to secure the remaining 50% owned by Britain's Scottish & Newcastle (S&N).
The decision they have found is beautiful. In mid-October Carlsberg agreed with Holland's Heineken to pool their funds together, purchase S&N and then divide it 50-50. The Danish would have 50% of BBH, plus S&N's French and Greek operations, while the Dutch would have control over assets in Britain and other European countries.
But such an arrangement did not appeal to the British brewers. It was reported on October 25 that the owners of S&N had refused to sell at the bid price of 7.2 pounds sterling per share and even mounted a counter-offensive, saying they would buy out the BBH stock from Carlsberg.
The outcome of this tug-of-war is anyone's guess.
Equally fierce battles are being fought on Russian territory. Moscow's Ochakovo Brewery, one of the major producers of beer and other beverages in Russia, is called the last Russian bastion. The comparison fits because the company is the only large player without foreign ownership.
However, their independence is costing them dearly. The market share of the sixth largest seller is slowly but surely shrinking.
Some experts say that in order to keep the market, Ochakovo occasionally sells beer below cost in some regions and instead relies on its lifesaver - the soft drinks division. Today Ochakovo is the leading player in the rapidly growing Russian kvass market.
Overseas companies have long been courting Ochakovo. Over the past five years the Russian company has received many bids to sell its assets.
The bidders included SABMiller and Heineken, wishing to consolidate their positions in the Russian market, and America's Anheuser-Busch, which wants to gain a foothold in it. Incidentally, the Americans are also regarded as potential contenders for the S&N share in BBH. Reports sometimes suggest that Ochakovo might acquire foreign shareholders soon.
But the Russian owners are still managing to be solely in control.
Outside observers consider a recent series of attacks on Ochakovo by the Russian Federal Service for Supervising Natural Resources (Rosprirodnadzor) to be motivated by foreign companies.
In July of this year, Rosprirodnadzor suspended the operations of the Moscow brewery for five days, saying the brewery was polluting the Moskva tributaries with industrial waste. The closure cost the company 120 million rubles. Then the service tried to close the plant for three months, but a court found the official ruling unlawful.
Yet the setback did not discourage the bureaucrats. Rosprirodnadzor has mounted a fresh attack on Ochakovo's branches and subsidiaries in southern Russia. It carried out checks on the South Wine Company, a resort and a sanitarium in the Krasnodar Territory. Next in line are the operations in Tyumen.
Market players do not rule out that the officials are doing someone else's bidding, and who knows, maybe Ochakovo could acquire foreign shareholders shortly after all.
The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.
