Carlsberg Group, a leading international beer producer, is mulling plans to build a brand new brewery in Ukraine, a move which will strengthen its already strong position in a country where per capita beer consumption has doubled in five years.
Analysts estimate that the new brewery, the first brand new beermaking facility built in Ukraine since Soviet days, could cost $10 million. This year, the Carlsberg group consolidated 100 percent ownership over Baltic Beverage Holdings, which in prior years acquired three breweries in Ukraine.
In acquiring BBH, Carlsberg gained a leading position in Ukraine through the Slavutych breweries in Kyiv and Zaporizhia, and the Lvivske brewery in Lviv.
Olena Markova, a BBH spokesperson in Ukraine was tightlipped, neither confirming nor denying plans to build a new brewery.
But on June 11, Viktor Kovalenko, head of the main administration of foreign economic relations and European integration at Kharkiv Oblast State Administration, told journalists that Carlsberg representatives conducted negotiations on a site for the brewery with Arsen Avakov, head of Kharkiv Oblast State Administration. Carlsberg was offered six land plots to choose from, Kovalenko added.
Oleksandr Sokolov, head of the analytical department of FinancialAnalytical Group ProConsulting, said construction of the new brewery by Carlsberg could enable it to “increase its share” in a highly competitive and fastgrowing market. Construction could take onetwo years, Sokolov added, pointing to the recent arrival in Ukraine of SABMiller. Britishbased SABMiller purchased the Donetskbased Sarmat brewing group from billionaire Rinat Akhmetov. SABMiller officials have valued Sarmat’s gross assets at $130 million, but declined to provide a purchase price.
Construction of a brand new brewery could help Carlsberg retain a leading position on this increasingly competitive market.
With the exception of Kyiv’s Obolon brewer, still controlled by domestic businessmen, Ukraine’s other large breweries have in recent years been snapped up by international beer groups, including InBev, known until recently as the Sun Interbrew group. InBev, Obolon, Carlsberg and Sarmat, hold about 95 percent of the market.
With no likely buying opportunities of large brewers on the horizon, Carlsberg decided to build one of its own to boost production in Ukraine, Sokolov said.
In 2007, annual per capita consumption of beer was 61 liters, while in 1998 annual beer consumption was 15 liters per capita, and in 2003 it was 33 liters, market analysts said.
This year annual per capita consumption of beer is expected to grow to 65 liters.
In 2007, beer production in Ukraine increased by 18 percent, compared to 2006, and amounted to 316 million decaliters. According to forecasts of Ukrpyvo, Association of breweries in Ukraine, this year production can increase by 14 percent, compared to 2007, and constitute 360 million decaliters. In 1998, beer production in Ukraine amounted to 68.8 million decaliters, while in 2003 the production was 170 million decaliters.
Carlsberg entered the Ukrainian market in 2004, when the company started to import its beer from Russian brewer Baltika. Later, it entered into a joint venture with BBH, eventually buying up the group.
