BBH expands with acquisition in Russia

Baltic Beverages Holding (BBH), owned by Pripps-Ringnes and the finish brewery Hartwall, acquired today a 20% share in the Chelyabinsk Pivo Brewery situated in Chelyabinsk, a city in the Urals. At the same time, a directed share issue was agreed that will increase BBH's ownership to 75%.

The Chelyabinsk economic zone, with as many as 20 million inhabitants, is Russia's second largest population centre.

Chelyabinsk Pivo is the leading brewery in the area. The peak annual production capacity is 60 million litres and employees number approximately 700. Modernization of the brewery will begin immediately with the aim of raising beer quality to the standard in the west and achieving a sizeable increase in production capacity.

After this acquisition, BBH will have a total of eleven breweries, four of which are in the Baltic countries, five in Russia and two in Ukraine. BBH is also the joint owner of seven malt houses.

Beer excluded from the Alcohol Act
The Alcohol Act with amendments, completed at the end of 1998, has now been approved by all decision-making bodies. According to the new law, beer is specifically excluded from the Alcohol Act. This ties in with the aims of the brewing industry.

The beer tax rose by 20% to 0.72 roubles per litre at the end of 1998. The share of taxes in beer prices has not increased.