Dutch brewer Heineken will start producing the traditional bread-based drink kvas at four of its Russian breweries as the country's beer market battles a steep downturn, the brewer said Thursday.
Heineken said in a press release that production of the mildly alcoholic Russian beverage would help fill empty capacity in its breweries. The Dutch brewer saw Russian beer sales plummet 10 percent in the first quarter, the Kommersant newspaper cited the company as saying, as Russians cut their beer consumption amid an economic downturn and laws aimed at curbing alcoholism.
“[Breweries] across the sector are underutilized by 40 percent on average. That statistic is about the same in our plants,” Kirill Bolmatov, Heineken's director of corporate relations in Russia, said in the statement.
“The technology for kvas production is similar to beer, and so the company did not have to make any additional investments in equipment,” he added.
Beer production in Russia fell 8.6 percent last year to 816 million decaliters as a drop in the price of oil and Western sanctions over the Ukraine crisis slowed Russian economic growth to just 0.6 percent, Kommersant reported, citing state statistics service Rosstat.
Federal bans on selling beer in outdoor kiosks, restrictions on advertising and higher excise duties have also helped shrink Russia's beer market 30 percent since 2008.
Denmark's Carlsberg said in January that it would close two of its ten breweries across Russia, while Belgian beer maker Anheuser-Busch InBev has closed four of its Russian plants over the last two years.
The kvas market, meanwhile, has been growing. Kvas sales rose 11 percent from January to July last year, according to market research firm Nielsen, Russian beer analytic agency Pivnoye Delo reported.
Heineken's turn to kvas marks its second outing on the market. In 2005 the brewer launched a kvas brand under the name Stepan Timofeyevich, eventually taking around 9 percent of the market before selling the brand to leading kvas producer Deka in 2009.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
