SUN InBev and Baltika to close breweries
When will the decline in Russian beer consumption bottom out? Russia’s beer sales have dropped more than 25 percent in the period from 2008 to 2013 and a further seven percent in the first six months of 2014. Brewers have responded by scaling back capacities and closing breweries.
AB-InBev’s subsidiary SUN InBev said on 1 October 2014 that it would close its Angarsk brewery in East Siberia. This marks the fourth plant closure by the world’s major brewer in Russia in two years. Russian media report that SUN InBev’s beer sales were down 13.6 percent in 2013 and 10 percent in the first six months of 2014.
SUN InBev would not say what it will do with the plant, only that the volumes of beer produced in Angarsk will be relocated to other SUN InBev plants.
“Given the general market decline, we must act and take the necessary measures to maintain the competitiveness of our Russian business,” Andrey Gubka, Anheuser-Busch InBev’s president for Russia and Ukraine, said in a statement.
Excise tax increases and various restrictions and bans have made Russia one of the most regulated markets worldwide.
Baltika, the Russian unit of Denmark’s brewer Carlsberg, also suspended production at its Chelyabinsk and Krasnoyarsk plants in September 2014, Russian media report.
On 16 September 2014 the World Bank said that Russia’s economy may have escaped recession, but that economic activity is stagnating. The World Bank forecasts GDP growth of only 0.5 percent for 2014. Higher food prices and the ruble depreciation already elevated consumer prices inflation in August.
All this does not bode well for beer consumption.
