Agreement between BBH and PepsiCo for Ukraine

Baltic Beverages Holding (BBH), which is owned equally by Orkla’s beverage company Pripps Ringnes and the Finnish company Hartwall, has made a long term agreement with PepsiCo International on manufacturing, marketing and distribution of soft drinks in Ukraine. The agreement will run from 1 April 2000.

BBH and PepsiCo has cooperated in the Baltic States since 1 January 2000. Pripps Ringnes and Hartwall have bottling agreements with PepsiCo which applies to Norway and Finland, respectively. In addition, Pripps Ringnes and PepsiCo have an agreement on cooperation in the Swedish market which will run from 1 January 2001.

The new agreement will enable BBH to make more efficient use of its nation wide distribution network in Ukraine, and will at the same time strengthen its position in the Ukrainian beverage market. The consumption of soft drinks is low in Ukraine, but consumption per capita is increasing. The estimated average per capita consumption is 8 litres, compared to approx. 25 litres in the Baltic States, 80 litres in Sweden and close to 120 litres in Norway.

Production, sale and distribution of the PepsiCo products will be handled by BBH’s existing two breweries in Ukraine.

BBH is with a 16% market share for beer one of the three leading brewers in the Ukraine.

BBH currently holds majority interests in a total of twelve breweries, four of which are located in the Baltic States, six in Russia and two in the Ukraine. BBH has also ownership stakes in eight malt houses. In 1999, BBH had net sales of NOK 3.2 billion and operating profit of NOK 0.8 billion. The total production volume of BBH’s breweries rose to 1,278 million litres.