Russia: Brewing capacities used only at 74.4% during January-May 2006

The Union of Russian Brewers along with “Business Analitika” has released the economic overview of “The beer market results as of the 1H of 2006”. The overview contains an analysis on main trends of the beer market and forecasts of its forthcoming evolution.

The preliminary results of the first half-year of 2006 have indicated two well expressed and steady trends of the brewing sector: the recession of the middle cost beer segment share and the strengthening of positions of the "license" segment. One must also mention the decreasing market share of the glass bottled beer.

“The 1H 2006 brewing industry results denied the recent myths about ostensibly superprofits which are received by manufacturers of beer in this season,” Chairman of the Executive Committee of the Union of the Russian Brewers Vyacheslav Mamontov has noted.

“Actually it is possible to speak about moderate dynamics of the beer market which as a whole corresponds to our forecast for 2006 - 5-7 %," Mamontov added.

The dynamics of the beer market during the first months of 2006 was an unexpected bad surprise even for experts. A very frosty winter has badly influenced the economic results of the brewing industry: January provided a decrease of 12,4% of beer sales year-on-year. Such a disappointing start couldn’t be mentioned since the soviet times.

Statistics of beer production reported decreases of beer output in over 30 Russian regions during January-May 2006. The negative brewing trend was reported in two federal districts (Central and Southern) out of seven. The engaged sector capacity for that period was only 74.4% of the annual average.

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