Turkish firm closes down beer factory in Russia

ISTANBUL

Turkish brewer Anadolu Efes has announced it will stop its beer production activities in the Russian city of Rostov, which makes up 5 percent of its total production in the country, by the first quarter of 2014 in the framework of its latest production optimization operations in the Russian market.

In a written statement yesterday to the Public Disclosure Platform (KAP), the company said the decision was made after the Russian beer market shrank by 20 percent during the last five years, and it will move production to other parts of Russia from Rostov. Anadolu Efes will also end its production activities in its Moscow facilities by Jan. 1, 2014, as it announced last month. Anadolu Efes, thus, will have six production facilities by next year, after its decision to stop production in two facilities this year.

In response to Russia’s serious alcohol problem, the Moscow authorities have recently imposed a series of tougher alcohol sale rules, banning the sale of beer from street stands as of Jan. 1, 2013. Before this ban, drinks with alcohol content under 5 percent were permitted for sale at street stands. The Moscow authorities also introduced a ban on the nighttime sale of strong alcoholic drinks from 11:00 p.m. to 8:00 a.m. The Russian beer market is expected to decline at a rate of low-double digits in 2013, mainly due to the negative impact of regulatory changes, according to another note by the company released on in November. Anadolu Efes expects the Turkish beer market to also decline at a rate of high-single digits, reflecting the expected impact of the regulatory changes.