E-Malt.com News article: Russia: SABMiller says Russia one of most exciting beer markets in the world

SABMiller PLC said the Russia is one of the most exciting beer markets in the world but has declined to reiterate comments that Western European markets are 'singularly unattractive', according to Thomson Financial, November 15.

In a conference call, chief executive Graham Mackay said: 'The Russian beer market is still growing very rapidly. It's one of the most exciting markets in the world and has been for some years now and obviously attracts a lot of attention.'

Mackay said SABMiller has a strong business in Russia -- growing in 'high-ish double-digits' consistently for at least the last five years -- though it is small and operates only in the premium beer segment.

'It's highly profitable for its size but it is not a mainstream player at all, so it doesn't have the bulk or scale of the three bigger players,' he said, adding the group has been rapidly expanding its business in the country.

'We've effectively been in an out-of-stock situation there for just about every summer for the last three of four years, so we have a capacity expansion going on and we are very pleased with our progress,' said Mackay.

The group earlier this year unveiled plans to invest 170 mln usd in a greenfield brewery in Ulyanovsk, some 100km east of Moscow. The new brewery, which is slated to have an initial capacity of 3 mln hectolitres, is expected to be operational in early 2009.

SABMiller has approximately 6 pct market share by volume in Russia, lagging rivals Baltic Beverages Holding, SunInterbrew and Heineken, however Mackay refused to be drawn on questions if the group was satisfied with its position as number four brewer in the country.

SABMiller, which has been rumoured as a potential white knight for Scottish & Newcastle PLC, currently being pursued by Carlsberg A/S and Heineken NV, with finance director Malcolm Wyman previously describing mature Western European beer markets are 'singularly unattractive'.

'We all know that Western European markets have been in decline,' added Wyman today, but refused to comment further in the light of the offer taking place for S&N.



16 November, 2007