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Jul 22, 2014

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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.

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"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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