Photo: RIA Novosti
This was made just two days ago. It’s fresh,” said Masaru Hemmi, chief
brewer of Japan’s Kirin Ichiban, pouring at the Moscow Beer Company’s factory
in Mytishchi. The occasion was last month’s start of licensed local production
of Ichiban.
Both sides feel justified in pouring a few well-earned drinks. The Moscow Beer
Company reckons it can sell Ichiban, which is one of the most popular beers in
its home country, to Japanese restaurants and food enthusiasts. Ichiban is
confident it has secured its foothold in the $20 billion Russian beer market.
Despite the optimism, these are not easy times for Russian brewers. Over the
past decade, the beer market surged by 40 percent, but then the global economic
crisis, increased taxes on alcohol and saturation depressed the market by as
much as 15 percent, causing the country to slip from third to fourth place
worldwide for total consumption.
“Russia has lost 12 [million] to 15 million hectoliters [roughly 10.26 million
to 12.78 million U.S. beer barrels],” said Igor Dementyev, general director of
The Moscow Beer Company, a midsized brewer. “That means that approximately five
or six breweries like us should be closed. And it is happening; a lot of
breweries have been closed and will be closed.”
Foreign Branding
Domestically produced beers, like cars, carry a certain amount of stigma.
Even foreign brands produced under license are widely considered to be inferior
to genuine imports. Specifically, this is linked to an alleged propensity to
cause headaches.
“Abroad, drinking a six-pack of Heineken is no problem. Here, two bottles will
give me a headache,” complained one beer aficionado.
One urban legend links the mysterious headaches to extra alcohol — or more
sinister chemicals — added to popular brands to keep the population docile.
However, there’s not much choice but to buy Russian. High import tariffs mean
that imported beers make up just 0.5 percent of the market — compared with
about 15 percent in the United States.
In Russia, that segment is largely replaced by licensed domestic production.
There are more than 40 foreign brands now produced locally — ranging from
classic Czech lagers such as Pilsner Urquell (produced by SABMillerin Kaluga)
to iconic Irish stout Guinness (produced by Heineken in St. Petersburg).
The Moscow Beer Company has seven licenses on the books, including a 40-year
contract to produce German Oettinger and a 25-year contract with Denmark’s
Faxe, as well as its new deal with Kirin. The local beer market is a
battlefield of giants, with little room for small independent breweries.
Carlsberg Group, AB InBev, Efes Breweries International, Heineken and SABMiller
together control more than 85 percent of the market.
Baltika, which is the biggest brand and part of the Carlsberg Group, has a
total brewing capacity of 5.2 million hectoliters [approximately 4.4 million
U.S. beer barrels] per month.
By comparison, The Moscow Beer Company, which started out as an importer of
beers and soft drinks in 1994 and only began producing its own brews in 2008,
turns out just 2.5 million hectoliters [approximately 2.1 million U.S. beer
barrels] per year.
Market analysts now say Brazil has displaced Russia from its place as the
world’s third-largest beer maker, and Germany is snapping at Russia’s heels to
move into fourth. So what went wrong?
For a start, Russia is not really among the great beer-drinking nations. Even
after the rapid growth in consumption over the past decade, Russians consume
just 66 liters (about 139 U.S. pints) of beer annually per capita, according to
estimates by Baltika.
Czechs get through a staggering 151 liters (about 319 U.S. pints), while
Germans drink 108 liters (about 228 U.S. pints) annually, according to a 2010
report by Carlsberg.
Experts put the drop down to three factors: The market was probably saturated
anyway; the financial crisis of 2008 ate into disposable incomes; and the
government has drastically ratcheted up taxes on beer.
The beer excise went up 200 percent, from three rubles per liter to 9 rubles
per liter, in January 2010. This year the tax is up to 11 rubles, and plans
exist for further hikes.
The real heavy hitters are the Russian brands — which account for the remaining
85 percent of the market. The biggest selling local brand (and the jewel in
Carlsberg’s Russian crown) is the Baltika product line, which accounts for 40
percent of all beer sales in Russia.
All rights reserved by Rossiyskaya Gazeta.
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