Latvia: Leading brewers Valmiermuižas Alus and Cēsu Alus to join forces

Two of the leading breweries in Latvia's northern Vidzeme region are to join forces, LSM reported on September 2.

In order to continue developing, craft brewery SIA Valmiermuižas Alus will join forces with the larger AS Cēsu Alus, the company said. Cēsu Alus is in turn owned by major Finnish brewer Olvi which also owns breweries in Estonia and Lithuania.

Valmiermuižas Alus founder and majority owner Aigars Ruņģis explained that although the company's performance is good, in the long term, development is possible only together with a larger beer producer.

"Although this is the best year in history for Valmiermuiža beer, we are also aware that we operate in a business environment that is unfriendly to small and independent brewers in Europe, as a result of which Latvia ranked last in the European Union in terms of beer production volume last year. This significantly hinders the ability of Latvian brewers to grow, invest and compete on a European scale," Ruņģis said.

He has previously criticized Latvia's regulation of independent brewers, stating that it is almost impossible for them to develop.

The claim that Latvia ranked last in the EU in beer production (among countries for which data are available) is supported by the most recent Eurostat data as reported by LSM previously.

Cēsu Alus board chairwoman Evija Grīnberga confirmed that Valmiermuižas Alus will continue to operate in Valmiermuiža, near Valmiera, and will maintain its existing recipes. Grīnberga noted that the companies will join forces to target the export market.

Valmiermuižas Alus said that last year and in the first seven months of this year, the company achieved the most successful operating results in its history: last year, turnover reached 10 million euros for the first time, and in the first seven months of this year, compared to the same period last year, it grew by another 5% - to 6.7 million euros.

Operating profit has increased more than four times, and sales of both its lemonades (+20%) and non-alcoholic beer (+40%) have grown significantly. The increase in the volume of exported liters has also been successful at 20%, and it is possible to get Valmiermuižas Alus beer on tap at selected bars in Estonia, Lithuania, Finland, Ireland, Great Britain, and Germany.

The merger of the two breweries is still subject to regulatory approval and the value and terms of the transaction have not been disclosed.