Russia: Heineken NV, the world’s fourth biggest brewery, plans further expansion in the growing Russian beer market by purchasing some more breweries in Russia due to sales decrease in Western Europe. The group’s financial director Rene Hufta Graflanda said that the company plans to perform a number of acquisitions in order to increase its market share from 7.5 per cent – and Eastern Europe is a prime target. "We really want to expand autonomously and through acquisitions in Russia," a Heineken spokeswoman said. This year the company decided to purchase six companies, out of which two are in Russia.

Analytics from Renaissance Capital predict that the beer market in Russia is set to increase. The Russian beer market is the fifth largest in the world. It is to increase by 5 per cent in 2005, in comparison with 3 per cent in Western Europe. "I don’t exclude that we will add some more companies to our business in Russia, because we want to strengthen our position,” said Grafland.

Heineken has third place in sales after "Baltica" and Russian representation of InBev. The market leader in Russia is Baltic Beverages Holding, a joint venture of Scottish & Newcastle Plc and Denmark's Carlsberg. The Dutch brewer, which in Russia holds the Bochkarav brand, said last October that it was buying West Siberia's Sobol Beer LCC brewery, which has an annual production capacity of 1.2 million hectolitres. Last August, Heineken acquired Central European Brewing Company and Volga Brewery.

Heineken NV bought Bravo International LLC in St Petersburg in 2002 (Heineken Brewery LLC from 01.03.2003). At the moment Heineken Russia embodies a group of 4 non listed companies located in different parts of the Russian Federation: Heineken Brewery LLC in St Petersburg with brand portfolio consisting of locally produced Heineken, national brands Bochkarev, Ohota, licensed Bavarian Lowenbrau, Buckler and imported Amstel and Murphy's; Volga brewery in Nizhny Novgorod with key regional brands Rusich, Okskoye and Volga; Shikhan brewery in Sterlitamak (Bashkortostan) with popular local brands Shikhan, Solyanaya Pristan and Sedoy Ural; and Sobol Beer in Novosibirsk famous for Sobol brand. The acquisitions provided the company with market share of 8.6% in Russia and strengthened its position No.3 on the Russian beer market. Heineken Russia is an employer of over 4000 people.

The main reason for the new acquisitions is a desire to increase income, which decreased in 2004 by 27 per cent. This decrease was the most impetuous in the last five years.

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