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Russia’s major brewery Baltika closes 2 plants as beer market slumps

January 29, 2015, 11:56 UTC+3 MOSCOW
Baltika said in a statement it had made this decision "amid the continuing general decline of the beer market related to the challenging macroeconomic situation"
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© ITAR-TASS/Vadim Zhernov

MOSCOW, January 29. /TASS/. Baltika, a leading Russian beer company with a market share of about 40%, said on Thursday it will close down two breweries and lay off 560 employees amid deteriorating market conditions.

Baltika, which has been part of the world’s fourth largest brewer Carlsberg Group since 2008, said in a statement it had made this decision "amid the continuing general decline of the beer market related to the challenging macroeconomic situation and unbalanced taxation and regulation of the industry in Russia."

The closure of Baltika’s breweries in Chelyabinsk in the Urals and Krasnoyarsk in the Russian Far East from April 30 will cut Carlsberg’s production capacity in Russia by about 15%.

The decision to shut down two breweries is the result of "thorough technical, logistic and financial analysis of Baltika’s production and logistics structure," the brewer said.

"Baltika’s production network has required optimization for several years already but the company was doing everything possible to increase its efficiency and to avoid brewery closures," it said.

"Nevertheless, the existing market situation forces Baltika to take measures to optimize its business and to close 2 of its 10 breweries to maintain the competitiveness and leadership in the Russian market," the company’s statement said.

According to data provided by Russia’s State Statistics Service (Rosstat), the domestic beer market shrank by more than 30% in 2008-2014.

The Baltika brewery is well-known for its Baltika key brand. The brewer also produces more than 30 other beer brands, including Arsenalnoye, Nevskoye, Yarpivo, Tuborg, Carlsberg, Holsten and others.

The Baltika brand enjoys the largest sales in Europe, according to data posted on the company’s website.

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