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. Last Updated: 07/27/2016

Beer Drinkers Go Plastic to Save Cash

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Ireland is praised worldwide for its pubs, and Germany for its Oktoberfest, but Russia stands out for the unusual structure of its beer market: Unlike Europe, Russia is increasingly bottling its beer in plastic.

In fact, according to research from the marketing agency Business Analytica, the consumption of beer in plastic bottles is rising between 10 percent to 17 percent a year.

Business Analytica calculated that Russia's total beer production in 2000 increased 22 percent to 52 million liters, while the production of beer packaged in glass bottles fell from 89 percent to 82 percent. Packaging in aluminum cans declined from 1.05 percent to 0.8 percent. And almost every fifth liter of beer brewed last year was sold in plastic bottles.

Practically all the large breweries have begun packaging beer in plastic containers. St. Petersburg's Baltika and Omsk's Rosar breweries both package 23 percent of their output in plastic bottles. The breweries Yarpivo and Tulskoye, which one year ago used no plastic packaging, now sell approximately 20 percent of their beer in plastic.

"In no European country has the population demonstrated such a strong interest in plastic," said Alexei Krivoshapko, an analyst at the investment bank United Financial Group. The reason for such devotion by Russians to beer in plastic bottles is simple to explain: It's cheaper.

The production cost of small glass bottles averages around 7 cents, about the same cost for producing a substantially larger plastic bottle.

The high demand for plastic containers is explained by the fact that Russian consumers are not very discerning, said Sergei Koshevoi, the general director of the company Yevroplast, a producer of plastic containers for beer, lemonade and vegetable oil.

"In Europe, buyers are more discriminating about beer than they are about many other products," said Koshevoi.

Many directors of Russian breweries agree. Sergei Popov, the commercial director of the Tver-based Afanasy brewery, said that his company first began packaging beer in plastic last October. Now, he said, the company sells fully half of its beer that way. Popov said that using plastic has been so successful that Afanasy plans to soon launch a new line of beers that will only be sold in plastic containers.

Like Afanasy, Kazan's Krasny Vostok brewery is catching the wave. The company plans to install a new assembly line for plastic bottling that will crank out 30,000 bottles per hour.

But while domestic brewers are increasingly using plastic, most of the beer sold in Europe and the United States is sold in aluminum cans. And aluminum can producers are betting that Russian consumers will soon go the way of their Western counterparts, with some predicting that canned beer will make up 10 percent of the market within three years.

Vladimir Nichiporuk, marketing director for Rostar, one of only two domestic producers of aluminum cans, is hoping that by the end of 2002 the consumption of canned beer will increase by 3 percent to 5 percent.

"The cheapest beers are packaged in plastic. People now have more money, and they are beginning to buy products of better quality," Nichiporuk said.

Despite the bullishness of the aluminum can makers, however, plastic bottle producers are moving full-speed ahead.

Yevroplast has invested $12 million to build three new factories with a combined capacity of 1 billion plastic bottles a year that are scheduled to open over the next few months.