Local beer brands boom in Ukraine

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Related tags: Ukraine

A strong sales increase for Ukrainian brewer Sarmat reveals how the
country's beer market is growing strongly in Russia's shadow and
adds new evidence to the popularity of 'local' brands, writes
Angelina Drujinina.

Sarmat increased production by almost 15 per cent to around 90m litres between January and May 2005, compared to the same period last year. Beer sales also rose 15 per cent, enabling the group to attain a net income of 238,943m hrivnas ($47,5 million).

"First of all, this increase was triggered by the launch of new brands - Elle and Dnipro, which have been very much in demand,"​ said Mikhail Grankin, Sarmat sales manager.

"This May, our Sarmat brand acquired 9 per cent of the market, and Dnipro reached 2.7 per cent. Second of all, we began using a system of primary distribution in the key regions. This means that a certain distributor has an exclusive right to work in a certain region. We are now finishing restructuring sales system in other regions as well.

"We also created exclusive sales departments in Crimea and Kiev as well as Donetsk and Lugansk oblasts," said Grankin.

Sarmat's results show how the Ukraine's beer market is rising well alongside a notoriously fast-growing Russian market - something that may provide new outlets for international firms as the number of independent brewers in Russia begins to dry up.

However, analysts have long pointed to the success of local brands in many parts of Eastern Europe, as opposed to big international brands grafted on to the market.

And, while this may be about to change with announcements that Foster's and Guinness are set to launch in Russia, Sarmat's results provide ample evidence that some local brands at least are more than holding their own.

Sarmat is one of the four biggest brewers in the Ukraine. The group own five factories across the country: Lugansk brewery, Crimea brewery, Dnipro (Dnipropetrovs'k brewery), Firma Poltavpivo and a brewery in Donetsk.

Serhiy Kalynin, Sarmat director-general, said at a press conference recently that beer consumption in the Ukraine's had no limit.

He added that Sarmat would try and take advantage of growth in Russia by using the close language link to attract more Russian consumers. Sarmat plans to have an office set up in Russia by early next year.

Sarmat has around 13 per cent of the domestic beer market and aims to post a 25 per cent sales increase for 2005.

Related topics: Market Trends

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