OREANDA-NEWS. On 13 March 2008 was announced, that according to the terms of a recently signed license agreement, Asahi Breweries Ltd. gives Baltika Breweries the right to its trademarks, know-how and technologies and also the exclusive right to produce, sell and promote Asahi Super Dry beer in the European part of Russia to the West of the 60 degrees East longitude and in the CIS countries. The agreement will remain in force until 2012.

During the past three years, the licensed segment of the Russian beer market has grown at a pace well ahead of the market as a whole. At the end of Q4 2007, Baltika had a 27.62% market share in the licensed segment (according to data supplied by the agency Business Analytica), which allowed the Company to become the leader in the segment.

Company President Anton Artemiev commented as follows on the agreement over Asahi Super Dry: ‘The entry into the portfolio of a new super-premium licensed brand will enable us to strengthen our position in the actively growing top-price part of the licensed segment. Until now, we were represented in this part of the segment only by the Kronenbourg 1664 brand, which, notwithstanding its small sales volume, is one of the most profitable entries in the portfolio. In 2008, we consider, that Asahi Super Dry will grow at a quick pace, significantly outstripping the rate of growth of the licensed segment as a whole, basically thanks to growth in the large cities of the European part of Russia’.

Beginning in June, Asahi Super Dry will be produced in Russia and brought to market in 0.44-litre bottles and 0.5-litre aluminum cans. Draught beer will enter production as early as April. The average retail price of packaged beer will be on the order of 45 rubles.

Russian consumers of Asahi Super Dry are men aged 25-35 who have a preference for expensive licensed and imported beer and are frequent visitors to good cafes, bars and restaurants. Therefore, promotional plans call for placing the main stress on the network of traditional Japanese restaurants.

By the end of the current year, arrangements will be finalized for deliveries to the countries of the CIS, starting with Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan; somewhat later, shipments will be made to Kazakhstan and the Ukraine.

Production of beer under license presupposes a multi-tiered system of quality control. Asahi Breweries plans to visit regularly the Baltika plant in St. Petersburg for this purpose. Moreover, detailed information and samples will be sent to Japan every month.

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Asahi Super Dry (‘dry’ in Japanese is ‘karakuchi;) first went on sale on March 17, 1987 and thanks to its unique taste it has been the number one brand in Japan in terms of sales for many years now. At present the beer is exported to more than 50 countries and is produced under license in China, Thailand, the Czech Republic, Great Britain and Canada.

The brand is brewed using a rare yeast culture, Asahi №318, which is not only effective in the fermentation process but also provides a complex aroma and elegant, fine taste — the pure and dry flavour characteristics of Super Dry. The malt barley used to produce Super Dry is selected in strict conformity with more than a hundred criteria, including the variety of the grain, its provenance and methods of green sprouting. In order to confer on the beer a sophisticated bitter note, expensive top quality varieties of hops are used.

According to data from Asahi Breweries Ltd, in 2007 some 19,000 hectolitres of Asahi beer were sold in all of Russia; of this amount, 2,700 hectolitres were sold in the European part of Russia.

At the present time, Baltika Breweries has 4 licensed beer brands: Tuborg — the leader of the Russian licensed segment, Carlsberg, Foster’s and Kronenbourg1664. Thanks to its successful 2007 marketing strategy, the Company was able to ensure the growth of the brands without raising its advertising expenses and at the end of Q4 2007 it took first place in the licensed segment. In 2007, the Tuborg brand increased its share of the licensed segment to 17.8%, with growth of sales compared to the same period in 2006 amounting to +70%. The Carlsberg brand grew by +34%; Kronenbourg 1664, by +132%; and Foster’s, by +63% (data supplied by the agency Business Analytica).