Those who are late will be punished by life itself

Carlsberg (or Baltika Breweries – depending on whose announcement you prefer to trust more) have signed an agreement with the leading Mexican brewer Grupo Modelo to extend their current business cooperation to include the markets of Russia, Kazakhstan, Uzbekistan, Ukraine, and Belarus as well as Kyrgyzstan, Turkmenistan, Tajikistan and Moldova.

Already, Grupo Modelo exports five of its brands, including its flagship Corona Extra which is the fifth most popular beer brand worldwide, to more than 150 countries.

Corona Extra has been available in Russia since the beginning of the1990s and has until now been distributed by a local importer.

The new cooperation between Modelo and Carlsberg’s subsidiary, Baltika Breweries, builds on a previous cooperation between Carlsberg and Modelo. While Modelo sells Carlsberg beer in Mexico, Carlsberg distributes Corona Extra in Italy, Switzerland, Malaysia and Singapore.

Bringing nine new markets in Eastern Europe and Central Asia into the fold may seem like a bold move, considering that only six of these markets have been “Baltika territory” up to now. Moldova, for example, is firmly in the hands of Efes.

According to their press releases, Baltika will start shipping Corona Extra 0.33 litre bottles in spring 2009 and will promote the beer mainly in cities with a population of one million people and above.

By using their own distribution networks they hope to approach a target group that goes for a super premium product, in their own words a brand that is “intended for young adults, residents of large cities with a high income, confident and successful, striving to get pleasure from every moment in life”.

Sounds like a plan.

But is it really?

Or did they just get their timing wrong? Like Mr Gorbachev and the Soviet Union.

In Russia, today, the economy is in steep decline. The World Bank in a recent report reckons that Russia’s GDP this year will drop 4.5 percent. Add to that the capital outflow in the order of USD 170 billion, and you’ll understand why the World Bank has warned Russia of an impending social crisis and massive social unrest.

Eastern Europe and Central Asia have been worst affected by recent developments. GDP in the region is expected to fall by 2 percent in 2009, compared with a 4.2 percent increase in 2008. The markdown in growth for the region as compared with the World Bank’s November 2008 forecast is 4.8 percentage points, the sharpest revision among developing regions.

So – time for a Corona Extra?

Perhaps Carlsberg will have to revise their Corona Extra sales estimates for 2009 downwards.