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Last Updated: Thursday, 24 July, 2003, 07:29 GMT 08:29 UK
Russian beer targets Britain

By Jorn Madslien
BBC News Online business reporter

Relaxed drinkers of warm British beer, beware! The apparently insignificant UK launch of the St Petersburg-brewed beer Baltika is more than it seems.

Baltika's market entry, aided by branded glasses, fridges and other gadgets, will target selected urban bars and pubs in London, Leeds, Manchester, Glasgow and Edinburgh.

Baltika is brewed in St Petersburg, but its owners are not Russian
And the businessmen behind the launch have high hopes that as the brew reaches throats previously only reached by other brands, it will rise to the number one spot in Europe, giving the Dutch beer Heineken the push.

Their vision may well become reality.

After all, this relatively unknown beer label has already risen from nought to become the second-biggest selling beer in continental Europe, all in little more than a decade.

Nordic brew

Toppling Heineken would obviously require a magnificent marketing effort.

But that should not pose much of an obstacle for Baltika, given that the brand is primarily a marketing creation in the first place.

In Vodka-friendly Russia, ignorance about beer was widespread until the early 1990s.

Baltika's Russian branding is key to its success in the UK
And yet, Baltika's Russian identity appears crucial to its success in the UK - with its authentic Cyrillic alphabet brand logo.

"St Petersburg's 300th anniversary celebrations have added to the buzz that surrounds the country at the moment, and there has never been a better time to introduce an authentic Russian beer to Britain," insisted the man overseeing the launch, Scottish Courage brands director Andy Neal.

Indeed, there is no disputing the beer's Russian authenticity, given that it is brewed in the country.

But its heritage is distinctly Nordic.

Baltika was the brainchild of a joint venture between the Finnish drinks group Hartwall and its Norwegian partner, the consumer goods group Orkla.

Together they stormed the fast-growing Russian market for beer with the launch of Baltic Beverage Holdings (BBH) in 1991.

They never looked back. Russia quickly rose to become the world's fifth largest consumer of beer, after Brazil, Germany, the US and China.

The BBH investment proved to be a shrewd one.

Internal transaction

Since then, BBH has changed hands.

Will Baltika be welcomed in British pubs?
Carlsberg Breweries, which was created through a merger between Carlsberg and the Danish-Norwegian brewer Pripps Ringnes in 2000, now owns 50% of BBH.

Orkla remains a stakeholder through its 40% stake in Carlsberg Breweries, but Hartwall last autumn sold its half to the UK brewer Scottish & Newcastle.

Consequently, the "import and distribution agreement" between BBH and the Scottish & Newcastle subsidiary Scottish Courage could be seen as little more than an internal transaction.

Tasty tipple

That may not be the point for the punters in Britain's pubs, however.

Indeed, given that Baltika has captured a 13% share of the Russian market, many of them may be keen to try out the brew.

True to its Russian - or perhaps Nordic - heritage, the 4.8% strong Baltika beer should be served cool; Scottish Courage recommends a Baltic-style serving temperature of 2 degrees Celsius.

This cool policy has proven popular among Russia's young, many of whom have made the switch from stronger spirits to beer in recent years, and Scottish Courage hopes that young Britons will follow suit.

But convincing the often older fans of traditional British ales to do the same may well prove to be too tough a challenge.


SEE ALSO:
Russia claims vodka trademark
06 Jun 03  |  Europe
Russian vodka faces flood of beer
20 Jun 02  |  Business


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