Russia: Sun Interbrew decided to apply the European scheme of the delivery of goods to retailers
Russia’s second-largest beer maker, Sun Interbrew, has recently announced that it is altering its distribution system. Sun Interbrew is set to sign contracts with retailers on its own, and charge distributors with logistic functions, unlike Baltic Beverages Holding, which has recently cut a number of its distributors by one-third, Russian media, Kommersant communicated on November 25.
Sun Interbrew decided to apply the European scheme of the delivery of goods to retailers, under which distributors have only logistic task, i.e. they transport beer to outlets. Distributors do not purchase beer but are only financially responsible for the money they bring to the producer. The producer will undertake all other jobs, such as entering networks, selling agreements with sales outlets and the pricing policy. “To develop the business, our distributors will focus on its logistic part in 2006,” Joe Strella, the head of the brewery holding, told Kommersant.
Unlike Sun Interbrew, Baltic Beverages Holding announced cuts in their distribution system. Sales will be allocated among the remaining companies, and the distributors will sign direct delivery contracts with Baltika.
Viktor Pyatko, vice-president of Heineken in Russia, is quite skeptical about Sun Interbrew’s initiative. “All the attempts to create a system like this have fallen flat so far. In theory, the system is more lucrative but I doubt that the Russian market has grown to abandon distributors. If Sun Interbrew succeeds, it will mean that we have reached a new level of development.”
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