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. Last Updated: 07/27/2016

Baltika to Branch Out With Own Water Label

Baltika, the nation's top brewer, said Monday that it will start mass production of its own brand of water after tests in its hometown proved successful.

The St. Petersburg-based beer giant said it would launch production of its Khrustalnaya mineral water at existing plants in Tula and Khabarovsk and market the product nationwide.

The company did not disclose planned production volumes or the level of investment in the project.

Baltika is a unit of Baltic Beverages Holding, which is owned equally by Britain's Scottish & Newcastle and Denmark's Carlsberg Breweries.

The Khrustalnaya brand was previously made in limited quantities for consumption in St. Petersburg. That production line will be wound down as facilities come online in Tula and Khabarovsk, the company said.

Khrustalnaya Pityevaya and Khrustalnaya 4 will be aimed at markets in Moscow, St. Petersburg, central Russia and the Far East, the company said in a statement.

Assuming the move was not triggered by low demand in the Far East, it makes good sense, said Natalia Zagvozdina, consumer goods analyst with Renaissance Capital.

"Their current move is aimed at repositioning the brand from the local to the national level," she said.

"Their new logistics allow them to do this at relatively low cost. This will also allow them to use the bottling capacities of the new Khabarovsk plant better."

The national beer market, one of the world leaders in terms of growth in recent years, is becoming increasingly more competitive and began to slow at the beginning of the year.

The mineral water market, by contrast, is still relatively uncluttered.

Earlier this year, juice and dairy leader Wimm-Bill-Dann launched its own label, while Swiss food giant Nestle has taken over existing labels Saint Springs and Clearwater.