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No smoke without beer

January 27, 2009

No smoke without beer
in Russia
Hampered by falling oil prices but helped by a falling ruble, Russia’s economy is still in better shape than most other European countries (see table on next page), with an estimated 7 percent growth of GDP in 2008. Only China and – rather surprisingly – Egypt score higher, according to The Economist’s estimates at the end of December. Unsurprisingly, major brands are still hurrying to set up production plants in Russia. Recent announcements include investments by Coca-Cola (a new bottling plant in Rostov-on-Don) and by Philip Morris, whose recently expanded plant near St. Petersburg is one of the group’s biggest plants in the world. Defying health warnings, most Russians like a smoke. They also enjoy a beer or three, and Russia’s leading brewer, Baltika, has just announced a 7 percent profit increase, on sales up by 13 percent. A substantial part of Baltika’s 36 million hectolitres of annual production is sold in the form of bottled beer. This and other good news from the consumer goods sector could account for the good health of Russia’s big label converters.
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