Heinz lowers prices, raises ad spend in Russia

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MOSCOW--H.J. Heinz Co. will lower the price of its Heinz tomato ketchup brand by a third in Russia beginning in March. The price reductionis an attempt to compete with cheaper rivals, according to Oleg Voyba, sales director at Mistral, the country's exclusive distributor of Heinz products.

"One can clearly see that the Russian market is now flooded with local and Ukranian trademarks, such as Baltimor and Chumacky. We want Heinz to compete with them," says Mr. Voyba.

The price cuts are part of a Heinz' $1 million investment program aimed at tripling sales by the end of the year. The program includes opening two wholesale centers in Siberia and the Ural region, and increasing advertising spend.

The bulk of ad spend in a three-month long campaign will feature TV, says Mr. Voyba. Leo Burnett/Moradpour is handling the campaign. Print and point of sale will also be used.

Heinz was distributed in Russia by several companies until March 1999, when Mistral was appointed sole representative.

Copyright February 2000, Crain Communications Inc.

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