Baltika Breweries (Russia) and Asahi Breweries Ltd. (Japan) have signed an agreement on the start of production of Asahi Super Dry beer by Baltika under license

According to the terms of a recently signed license agreement, Asahi Breweries Ltd. gives Baltika Breweries the right to its trademarks, know-how and technologies and also the exclusive right to produce, sell and promote Asahi Super Dry beer in the European part of Russia to the West of the 60 degrees East longitude and in the CIS countries. The agreement will remain in force until 2012.

During the past three years, the licensed segment of the Russian beer market has grown at a pace well ahead of the market as a whole. At the end of Q4 2007, Baltika had a 27.62% market share in the licensed segment (according to data supplied by the agency Business Analytica), which allowed the Company to become the leader in the segment.

Company President Anton Artemiev commented as follows on the agreement over Asahi Super Dry: ‘The entry into the portfolio of a new super-premium licensed brand will enable us to strengthen our position in the actively growing top-price part of the licensed segment. Until now, we were represented in this part of the segment only by the Kronenbourg 1664 brand, which, notwithstanding its small sales volume, is one of the most profitable entries in the portfolio. In 2008, we consider, that Asahi Super Dry will grow at a quick pace, significantly outstripping the rate of growth of the licensed segment as a whole, basically thanks to growth in the large cities of the European part of Russia’.

Beginning in June, Asahi Super Dry will be produced in Russia and brought to market in 0.44-litre bottles and 0.5-litre aluminum cans. Draught beer will enter production as early as April. The average retail price of packaged beer will be on the order of 45 rubles.

Russian consumers of Asahi Super Dry are men aged 25-35 who have a preference for expensive licensed and imported beer and are frequent visitors to good cafes, bars and restaurants. Therefore, promotional plans call for placing the main stress on the network of traditional Japanese restaurants.

By the end of the current year, arrangements will be finalized for deliveries to the countries of the CIS, starting with Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan; somewhat later, shipments will be made to Kazakhstan and the Ukraine.

Production of beer under license presupposes a multi-tiered system of quality control. Asahi Breweries plans to visit regularly the Baltika plant in St. Petersburg for this purpose. Moreover, detailed information and samples will be sent to Japan every month.