The brewer closed another plant in Russia

The world's largest beer producer AB InBev has closed its second plant in Russia over the past year. Following the shutdown of the Kursk plant last August, production at the Novocheboksarsk plant has now ceased. Before this, AB InBev negotiated with the local administration about providing subsidies, but the Russian government opposed the regions giving preferences to alcohol companies.

Photo: Kommersant / Dmitry Lebedev

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Photo: Kommersant / Konstantin Melnitsky / buy photo

Photo: Kommersant / Konstantin Melnitsky

Photo: Kommersant / Konstantin Melnitsky / buy photo

Photo: Kommersant / Dmitry Lebedev

Yesterday, SUN InBev OJSC, the Russian representative office of AB InBev, stopped its plant in Novocheboksarsk, Chuvash Republic, Andrey Erin, director of corporate relations at SUN InBev, told Kommersant. The company called this step a radical measure taken to “maintain the competitiveness of business in the conditions of strict legislative regulation and an increasing tax burden.” AB InBev recalled that from 2009 to 2013, the beer excise tax increased five times - to 15 rubles. per liter, and from this year the sale of beer in kiosks, through which brewers sold up to 30% of their products, is prohibited. At the end of last year, the volume of the Russian beer market decreased by more than 20% compared to 2008, the company states. In January-April of this year, beer production in the country, according to Rosstat, fell by another 10.7%.

The further fate of the Chuvash plant, which accounted for up to 10% of the beer produced by AB InBev in Russia, has not yet been determined, the company says. The plant's volumes will be redistributed among its other Russian enterprises - the company still has seven operating plants. Last August, AB InBev already closed its plant in Kursk, also explaining this by the desire to maintain competitiveness. Even earlier, in December 2008, the company stopped production at the plant in Pushkino, Leningrad region, purchased in 2005 from entrepreneur Oleg Tinkov.

AB InBev ranks second after Carlsberg in beer sales in Russia. The market share in physical terms, according to Nielsen data for the first quarter of 2013, is 14.7%. The Russian portfolio includes the brands "Klinskoe", "Sibirskaya Korona", Stella Artois, Bud, Staropramen, etc.

Kommersant reported on April 11 that AB InBev could close the plant in Novocheboksarsk. Then the head of Chuvashia, Mikhail Ignatiev, informed Prime Minister Dmitry Medvedev in writing that the brewing company was asking for subsidies for the enterprise, and in case of refusal, “threatens to close production,” excise taxes on which provide about 3% of the republican budget’s own revenues, or about 604, 2 million rubles. The press secretary of the head of the republic, Mikhail Vansyatsky, later told Interfax that the company asked for subsidies in the amount of 2 rubles. per liter of product - only about 60-70 million rubles. in year.

The federal government, however, is opposed to providing regional subsidies to brewers and distillers. On April 25, Deputy Prime Minister Arkady Dvorkovich instructed the relevant ministries and departments to prepare their proposals to deprive regions of incentives to provide preferences to alcohol producers. As Kommersant reported yesterday, the Ministry of Finance as a result proposed to legislatively prohibit the provision of subsidies to alcohol factories, and the Ministry of Industry and Trade - to change the procedure for distributing the regional part of the excise tax, tying it to the population of the constituent entity of the Russian Federation. The Federal Antimonopoly Service and Rosalkogolregulirovanie also spoke out against subsidies for alcohol producers.

“The situation in the industry is really difficult now, so further closure of breweries in the country is possible,” believes Efes Rus representative Kirill Bolmatov. He refused to comment on the prospects of closing his company's factories. The companies Baltika (owned by Carlsberg) and Heineken also did the same.

According to the results of the first quarter, among the leaders of the Russian beer market, AB InBev showed the worst results: the company's sales in January-March fell by 17%, while Heineken's drop was approximately 5%, and Carlsberg's was 2%. Efes did not disclose sales data in Russia, but noted that its consolidated sales in the first quarter fell by 5.4% due to the situation in the Russian market.

Oleg Trutnev

InBev does not pour in Chuvashia