Baltika Says Sales in '07 Rose 30%

Baltika Breweries, the country's No. 1 beer maker, said Wednesday that sales increased 30 percent in 2007, boosted by higher income and changing patterns of consumption.

"Some government measures, such as tight control on consumption of spirits, and natural factors like this year's unusually warm weather have also spurred preference for beer," Baltika president Anton Artemyev told reporters.

Artemyev described 2007 as "a very successful year for Baltika Breweries" with "headlong growth of the Baltika brand both in Russia and abroad."

Profit grew 21 percent, driven by rising demand for higher-priced foreign brews made under license. Sales of the Kronenbourg lager, which was licensed from Scottish & Newcastle, went up 132 percent in 2007.

Other licensed brands, including Foster's and Carlsberg, showed impressive dynamics, with sales rising 63 percent and 34 percent, respectively.

Net income rose to 399 million euros ($587 million) from 331 million euros in 2006, the company said Wednesday in a statement.

Higher prices, however, for malt and electricity and a rise in distribution costs hampered profit and forced consumers to pay more, Artemyev said.

Although domestic demand for beer was expected to rise only 5 percent this year, compared with 16 percent last year, sales abroad could help Baltika, he said. Exports climbed by more than one-fifth as the brewer added eight new markets.

Artemyev said the Baltika brand had grown internationally, with a foothold in "exotic countries such as North Korea and Cote d'Ivoire."

Baltika's nonalcoholic brand, favored in Russia by drivers and religious people, has gained wide acceptance in Iran, he said.

The company is also conducting feasibility studies on Eastern Europe and some African countries to expand its overseas market share, Artemyev said.

Baltika spent 262 million euros last year to upgrade production facilities and to build an ultra-modern factory in Novosibirsk with capacity to produce 4.5 million hectoliters per year.