Scottish & Newcastle moves into Russia

Deal gives S&N share of top spots in several Eastern European countries

Feb 14, 2002 - Scottish & Newcastle Breweries is buying a 50% stake in Russia's biggest brewer for 1.2bn. It is buying the family-controlled Finnish drinks group Hartwall, which has a major Russian joint venture, BBH, with Carlsberg Breweries. BBH's Baltika beer brand is the biggest seller in Russia, where drinkers are turning away form vodka.


"The Russians, especially the young, are deciding they prefer to drink beer - they want something more refreshing. It's becoming a cultural change out there," said S&N chairman Brian Stewart.

The deal will give S&N a share of No. 1 positions in Finland, Lithuania, Estonia and other Eastern European countries. The Hartwall family will retain their equity in the company that was founded in 1836 and controls 45% of the Finnish beer and soft drinks market. Erik Hartwall, managing director, and BBH chairman Henrik Therman will join the board of S&N.

As well as being clear market leader in Russia, BBH has shares of between 45% and 49% in Estonia, Latvia and Lithuania, while the business is number three in the Ukraine, with an 18% share of the market. Hartwall's Lapin Kulta is the market leading beer for Finns. Sales in all of its territories have grown by 60% since 1998.

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