Local brewers benefit from foreign brewers’ troubles

Why do Russians prefer local beer brands? Because some of them are cheaper than the foreign owned ones. Over the past five years, the share of local brands in the Russian beer market has increased from 15 percent to 25 percent, the Turkish brewer Efes reported in January 2016.

While some of these local brands may be better tasting than the foreign-owned ones, the main reason for their appeal seems to be their lower price points, Russian media followed up in February 2015.

The large international breweries, including Carlsberg/Baltika, Heineken, AB-InBev and Efes have seen their market shares decrease since 2008, when Russia’s beer consumption began its steep decline.

Denmark’s Carlsberg reported that Russia’s beer market contracted by 10 percent in 2015 with per capita consumption dropping to 50 litres.

Russia’s brewers are not the only ones to suffer. Russian exports of vodka and other alcoholic beverages also declined sharply last year due to the Ukraine conflict and Western sanctions.

According to Russian media citing official statistics (can they be trusted?), revenue from alcohol exports in 2015 amounted to USD 111.9 million, which is a decrease of 40.2 percent from 2014, when revenues stood at USD 187.1 million.

Exports to Ukraine – the biggest importer of Russian vodka before the annexation of the Crimea and the conflict in the county’s east – allegedly collapsed from USD 38.6 million in 2013 to a mere USD 3.87 million last year.

The revenue from vodka exports to Britain, Latvia and Germany also declined significantly due to sanctions, falling by 35, 14 and 28.6 percent respectively, Kommersant reported.

Russia: local brewers bite into foreign brewers’ market shares (2015)