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. Last Updated: 07/27/2016

Beer Market's Thirst Boosts BBH Volumes

LONDON -- Strong Russian beer sales boosted Eastern European brewer Baltic Beverages Holding to a 14 percent rise in first-quarter beer volumes, as it reaped further growth from one of the world's fastest-growing beer markets.

BBH is owned 50 percent each by Britain's Scottish & Newcastle and Denmark's Carlsberg and is a key source of growth for both brewers, which are largely dependent on sluggish Western European beer markets.

BBH, whose main asset is a majority shareholding in Russia's biggest brewer Baltika, said on Tuesday that its first-quarter performance followed a strong second half of 2004, and that it was well placed for profitable growth in 2005.

"We believe that BBH is well placed to grow in its markets and we are confident of maintaining margins in 2005," John Nicholson, S&N's chairman of its greater Europe and U.S. business, told a conference call.

The brewer's first-quarter Russian beer volumes rose 16 percent, outpacing an overall Russian market that was up just 3 percent, with BBH's Russian market share at 36.1 percent, up 4.2 percentage points from the previous first quarter.

Nicholson said he expected to gain further market share, especially from the smaller brewers, and added that he was comfortable with trading in April and May.

BBH said the Russian beer market grew at a slower rate due to inventory buildup by competitors in the first quarter of 2004, but it still foresaw the beer market, measured by volume, growing at a mid-single-digit percentage rate for 2005. Russia is the world's fifth-largest beer market.