Russia: East European brewer Efes Breweries International NV (EBI), the London-listed firm, 70 % owned by Turkey's leading brewer Anadulo Efes, expects the Russian beer market to grow 8-9 % in 2005. Chief Executive Muhtar Kent sees EBI growing three-times this rate. EBI makes nearly 80 % of its profits from Russia, has outpaced the national beer market in recent years helped by the growth of its Stary Melnik and Efes Pilsener beers, according to Reuters.

Company’s CEO, Kent, says EBI has grown strongly to become the fourth biggest brewer in Russia in volume terms with a 6.6 % share and in the first nine-months of 2004 grew volumes 60 % against a Russian beer market up 13 %. "We see the market growing around 8-9 % in 2005, while we expect to grow significantly above that level -- at least three fold that volume rise," Kent said.

Russia is the fifth largest beer market in the world behind China, the U.S., Germany and Brazil and along with China is one of the fastest growing. Kent said restrictions on beer advertising and outdoor consumption of beer were unlikely to halt the dramatic growth of beer at the expense of vodka.

Kent is more upbeat than Russian beer market leader Baltic Beverage Holdings that expect the market to grow 10 % in 2004 and 5 % in 2005. BBH is 50-50 owned by Denmark's Carlsberg and UK's Scottish and Newcastle.

EBI posted a 45 % fall in nine-month net profit with the Jan-Sept slip coming after a one-off gain in the earlier nine-month period. Before that gain, nine-month operating profit rose 47 percent on net sales up 56 % at $305.8 million.

EBI reported net profit of $28.8 million for the first nine months of 2004, down from $52.2 million in the previous nine-month period due largely to a capital gain from its acquisition of the Amstar brewery in Russia during August 2003. Shares in EBI closed down $0.50 at $28.25 following a strong run-up from its October London flotation offer price of $23.25. The flotation allowed Anadulo Efes to cut its stake in EBI to 70 % from 85 percent.

Efes Breweries International was founded in the Netherlands as the Holding company of the Efes Beverage Group’s International brewery operations. Efes Breweries International has had over 135% compound growth in volume over the past 4 years since the start of its operations and became a leading producer of quality and premium beers across a territory spanning from the Adriatic to China. Efes Breweries International currently owns and operates 9 breweries and 2 malteries in Russia, Romania, Kazakhstan, Ukraine, Moldova and Serbia, with a total annual capacity of around 9 million hectoliters of beer and 50,000 tons of malt. In 2002 total sales volume of Efes Breweries International reached around 320 million litres and is expected to increase over 500 million litres in 2003, through significant organic growth and acquisitions.

Anadolu Efes / Efes Beverage Group Anadolu Efes is the main listed company of the Efes Beverage Group and is the major shareholder of Efes Breweries International with 85% share. Efes Beverage Group, one of the largest beverage groups across a territory spanning from the Adriatic to China, currently consists of 14 breweries, 4 malteries and 9 Coca-Cola bottling facilities in 10 countries and is among the 10 largest European brewers by sales volume as of 2002. The Group’s total beer sales volume, which was close to the 1 billion litre threshold in 2002, is expected to maintain its rapid growth in 2003 to reach around 1.2 billion litres.

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