Russia: In 2005 Baltika Breweries sold a record volume of beer in the Russian history

Baltika Breweries have summed up on February 15 its operations in 2005. Under the growing competition and active consolidation of the market not only did Baltika retain its leading position but also strengthened it considerably, having brewed almost one quarter of the Russian beer.

In 2005 Baltika Breweries market share amounted to 24,1% (in 2004 - 23%), sales volume in the reporting period grew by 13%. In total, 225,4 mln. decalitres of production were sold, including 224,4 mln. decalitres of beer - a record figure of annual sales in the history of the Russian brewing.

The Russian beer market increased by 6% in 2005, keeping its deceleration trend. Almost half of the market increase was contributed by Baltika Breweries, whose growth rate was two times above the market.

Increase of sales of the flagship brand of the company - “Baltika”, - was 11,5% in 2005 compared to 2004. Key sub-brands have displayed positive dynamics - sales of “Baltika #7 Export”, leader of premium segment, increased by 29%, “Baltika #5 Gold” - by 55%. “Baltika #3 Classical” retained positive dynamics and is still leading in the biggest, mainstream segment.

“Arsenalnoye”, second brand in Russia by sales volume since 2004, increased by 6,2% in the reporting year. Year 2005 was successful also for the regional brands: “DV” has grown by 35%, “Samara” - by 17,5% and “Leningradskoye” - by 49%.

In 2005 Baltika Breweries further secured its position in key market segments: share of company brands amounted to 36% in the mainstream segment, rose from 24% to 30% in the premium, exceeded 29% in the economy and amounted to 8% in the licensed segment.

Export sales volume increased by 23% in the reporting period compared to 2004, and totaled to 13,9 mln. decalitres. Today the company exports to 38 countries - all CIS and other foreign countries, including USA, Great Britain, Canada, Germany, Israel, Greece and the Baltic states. Last year it launched beer deliveries to Norway, Finland and Ireland. Baltika products make up over 70% of the Russian beer exports.

Success of Baltika Breweries in 2005 was in many respects related to integration process involving BBH companies in Russia - Baltika, VENA and Pikra.

“Investments in brand development, exchange of best practices and experience, efficient distribution system and up-to-date marketing tools have provided the company for an excellent growth and a quarter of the Russian beer market. Further development of Baltika is inevitably linked with closer cooperation of the companies within the holding” - told President of Baltika Breweries, Anton Artemiev.

Official financial statement for the year 2005 is to be published on March 16th, 2006.