Foster's to launch beer in Russia

Related tags Foster Beer market Russian beer market Beer

Australian beer giant Foster's has teamed up with Russia's leading
brewer to become the latest contender for riches in the Russian
beer market gold mine, but the competition is strong, writes
Chris Mercer.

Foster's Brewing International (FBI), including UK licence partner Scottish and Newcastle, has announced its Foster's lager brand will be marketed and distributed in Russia by Baltika Breweries, itself the subsidiary of Baltic Beverages Holdings, a joint venture between Scottish and Newcastle and Carlsberg.

Foster's will attack the premium end of the Russian market which has grown at a rate three times faster than the overall beer market in 2004, and where demand for international, licensed beer is expected to double over the next three years.

Rick Scully, FBI's managing director, said the deal with Baltika was an excellent opportunity: "Foster's is the world's 7th largest international beer brand, but to date has been under-represented in Eastern Europe and the former CIS countries"​.

His enthusiasm is backed up by well-documented statistics which show the Russian beer market to be the fifth largest in the world and the fastest growing in Europe since 1996. Foster's has predicted another 20 per cent growth up to 2010, bringing total market volume to 95 million hectolitres.

Foster's is not the only brewer to have noticed this, however, and the Australian brand will be up against stiff competition from beers already established on the market, such as SABMiller's Transmark and Miller Genuine Draft, which posted a 51 per cent volume increase and an 80 per cent sales rise respectively in the first half of 2004.

Dutch brewer Heineken also recently reported strong growth at its brewery in St. Petersburg, which together with Moscow accounts for the consumption of 54 per cent of premium beer in Russia.

Taimuraz Bolloyev, president of Baltika said: "I believe that Foster's will be an attractive choice for Russian beer consumers due to the unique Australian-ness of the Foster's brand, together with Foster's Brewing International's stringent focus on freshness and dedication to product quality."

Baltika, which controls 36 per cent of the Russian market and has sales figures almost double that of its nearest rival, is in a better position than most to make sure Foster's performs well in Russia and takes advantage of the projected market growth.

Baltika is also the only company with a brewery in Russia's far east, where relatively low beer consumption lends new potential for market growth, perhaps especially for Foster's which already claims to be the most recognised brand in Asia.

In the end, Foster's needs representation in Russia to further its aims of becoming one of the world's top five premium beer brands within three years and the number three brand within five years.

Related topics Markets Beer & cider

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