Read his lips …

… and pay close attention to the maps that he shows. Alejandro Jimenez, the CEO of Efes International, announced at the Canadean Beer Strategy Conference held in Madrid in April that Efes would continue its acquisition policies with a focus on Russia and the former member states of the Soviet Union. He may have to rush things up a bit.

It was in February 2008 that Efes acquired the Lomisi Brewery in Georgia. Efes Breweries International bought 100 percent of Lomisi Ltd which is the leader in the Georgian beer market with an estimated market share of 42 percent by volume in 2007, up from 35 percent in 2006. Lomisi also has a soft drink operation in Georgia.

No purchase price was given.

Anadolu Efes said Lomisi had a total annual brewing capacity of approximately 0.55 million hl in 2007 and operates two breweries in Alkhagori and Natakhtari, making six brands of beer. According to Efes, the Georgian beer market has grown 16 percent on a compounded annual basis between 2002 and 2007. Per capita beer consumption is said to be 19 litres.

All three Caucasian countries – Georgia, Armenia and Azerbaijan – are beer consumption countries. Of the three, only two are Christian – Georgia and Armenia. Both are poor. Moreover, Georgia has suffered from a Russian ban on its produce and its political situation is far from stable. Armenia, which is both poor and politically shaky following a possibly rigged election, has the added disadvantage of an unsolved historical/political conflict with Turkey. For a predominantly Turkish company like Efes it would be close to committing political suicide if it were to buy into Armenia.

Which leaves Azerbaijan. In Azerbaijan, which borders on the Caspian Sea, the majority of the population is Muslim, yet the country is oil-rich with a GDP that is to rise 18 percent in 2008 and 15 percent in 2009 according to recent estimates by the International Monetary Fund. Small wonder both Efes and Baltika Breweries from St Petersburg have been circling the Baku-Castel Brewery in Azerbaijan’s capital Baku, which enjoys an almost undisputed market leadership were it not for Baltika’s and Efes’ beer imports into this country of 8 million people.

A discrete takeover battle between Baltika and Efes cannot be ruled out as the French owners seem quite willing to accept a generous offer. Whoever is going to buy Baku-Castel will get their hands on a real money spinner as beer prices in Azerbaijan stand at EUR 0.70 per half litre of beer.

Baku-Castel is hoping to sell more than 300,000 hl of beer this year, despite the fact that the country suffers from a 20 percent rate of inflation, erratic electricity and gas supplies and a construction boom that has sent real estate prices sky high. Near Baku’s harbour a luxury hotel is currently going up. The market for hotel accommodation is still tight as oil men are prepared to pay almost obscene amounts of money for a pillow on which to rest their head at night.

Baku’s skyline is changing fast as all new buildings aim for the sky. The majority of the population however has to make do with a pension of 65 Manat per month (EUR 50), although you would not have thought so if you consider the almost absolute dominance of Mercedes cars in Baku’s streets. In March Baku hosted an Auto Show which featured Western luxury cars, such as Bentley, Porsche and Audi. Hopefully the government will spend some of its oil proceeds on improving the roads or the luxury cars will spend more in a garage than in the streets.

In the meantime Azeris will console themselves with a beer and dream of Baku hosting some future Olympic Games – that’s true. You cannot accuse Azeris of too much modesty.