Belgian Interbrew first foreign brewer into Ukraine

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BRUSSELS -- Belgian brewing giant Interbrew expands east today with the purchase of over half of a Ukrainian beer company, marking the first international deal in the history of that country's brewing industry.

Marketing strategy for Ukraine will be the same as in Hungary, Croatia, Romania and Bulgaria: build the local brand - in this case a lager called Chernigev.

"Our main concern is to improve the quality of the local brand before we think of launching our international brands onto the market," says an Interbrew spokeswoman. "That has been our strategy in the other four eastern European countries in which we operate and it seems to work."

Chernigev is one of the country's best known brands with 6% of national beer sales volume and a dominating 90% volume share of the local market in and around the capital Kiev.

The Interbrew/DESNA deal is a first for the Ukrainian beer industry. But other major international players, including Anheuser-Busch and Heineken, are believed to be close behind Interbrew in focusing on the country's 53 million thirsty citizens.

Ukraine's number one local brewer, Kiev-based Obolon, is rumoured to be planning a similar international deal to the one signed today. Obolon boasts a national volume share of 7% and it produces over 780,000 hectoliters of drinks including beer.

"Ukraine is unstable economically but like Russia, it is too big be ignored by FMCG marketers," says one eastern Europe analyst.

The purchase of 50.8% of DESNA adds 500,000 hectolitres to Interbrew's 36m hl global sales and may push the brewer up from sixth to fourth place in international rankings.

According to last year's sales volume figures, Anheuser- Busch is the biggest brewer in the world, followed in order by Heineken, Miller, South African Breweries and Brazilian- owned Brahma. However, the gap between the last two and Interbrew is very narrow.

"All three of us produce close to 36m hectolitres," says an Interbrew spokeswoman. "Today's deal may change the order somewhat."

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