"Persha Private Brewery" enters the Russian market

The popular Ukrainian beer “Persha Privatna Brovaryna” (PPB) began to be bottled in Russia. The license for production was received by the Moscow Brewing Company, which bought half of the shares of PPB last year. The company says that it will compete in this market primarily with one more Ukrainian manufacturer - the Obolon company. The latter's products are in great demand in Russia due to their low cost, but PPB prices will be even lower.

On January 12, at the facilities of the Moscow Brewing Company in Russia, the bottling of Persha Privatna Brewery. Bochkovo beer began, PPB told Kommersant. The company does not specify production volumes. “This is a trial batch, future production will depend on demand,” says PPB Marketing Director Maxim Vasiliev.

The co-owner of both companies is Oasis CIS, but so far the partnership has developed only in one direction - PPB launched the production of Russian brands in Ukraine. At the end of 2011, the company introduced the Zhiguli, Oettinger and Cervena Selka brands to the Ukrainian market. As noted in the PPB report with reference to its co-owner Andrey Matsola, the company does not exclude the entry of Ukrainian beer into the market of Kazakhstan, where Oasis is now finishing the construction of a brewery.

The Russian beer market, unlike the Ukrainian one, is growing. According to Rosstat, over the 11 months of last year the increase was 4.5%, to 969.1 million decaliters. In Ukraine, over the same period, production fell by 0.2%, to 281.3 million decaliters. “Our capacities in Ukraine are full, so we cannot produce beer here and export it to Russia, and the market itself seems to us extremely promising,” notes Mr. Vasilyev.

The company, oddly enough, calls its main competitor in this market not Russian brands, but another Ukrainian manufacturer, Obolon. “In Russia, loyalty to Ukrainian beer has formed - these products are considered to be of high quality,” notes Mr. Vasiliev. Therefore, PPB will be positioned on the market precisely as Ukrainian beer - even the name will remain in Ukrainian, and this quality will also be emphasized in marketing activities.

Now Obolon occupies a good position in the Russian Federation due to its price. A liter of Obolon beer costs about 60-70 rubles there. ($2-2.3). However, PPB products will be even cheaper - beer will be sold in 1-liter and 2-liter PET containers at a price of 55 rubles. ($1.8) and 100 rub. ($3.3) respectively. According to Mr. Vasiliev, Obolon occupies about 5% of the Russian beer market. “In the long term, we plan to take away 20% of consumers from this company,” he says.

Experts believe that this will not be easy. “Obolon has been on the market for more than 15 years, its products are recognizable and in demand,” notes Alik Tuigunov, executive director of the Union of Russian Brewers. According to the head of one of the Russian distribution companies, Obolon has managed to establish a strong distribution system. “The company has gained a good reputation in the market because it always fulfills its obligations,” notes Kommersant’s interlocutor. And the deputy marketing director of the Obolon company, Maxim Kushnir, notes that with the start of bottling PPB beer at the Moscow plant, it will be difficult for the company to position itself as a Ukrainian producer. “This is no longer entirely Ukrainian beer, even here it is produced by a company that is half owned by the foreign Oasis. And there it will be bottled at local facilities,” he notes.

In addition, the introduction of a new brand to the market will be complicated by the ban on beer advertising in Russia, which came into force this year. “Companies are left with only price competition and a war for shelf space,” agrees Mr. Vasiliev. One of the importers of Ukrainian beer to Russia notes that PPB. Bochkove is not particularly popular there. "PPB is much more popular among consumers. Chorne", "Galician Crown" and Stare Misto," he notes. The PPB explains that the choice of the brand is dictated by its cheapness - the remaining varieties are premium.

Maria Popova

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