Brewery merger affects Lithuania

Mar 01, 2001
BNS

The group's companies, whose total beer sales in the Baltic states reached about 1.8 billion liters last year, had a similar market share in Latvia and Estonia.

In Lithuania, Baltic Beverage Holdings currently holds 86.6 percent of shares in Kalnapilis and nearly 98 percent of Utenos Alus. The group also owns Jungtinis Alaus Centras, the company that markets the two breweries' production.

It has decided to sell its shares in Kalnapilis to secure approval from Lithuanian competition authorities for a merger transaction.

Last year, Denmark's Carlsberg, which owns 58.1 percent of Svyturys, Lithuania's leading brewery, and Norway's Orkla, which holds a 50 percent stake in Baltic Beverage Holdings, announced the merger of their brewing activities, creating one of the world's largest brewery groups.

The Lithuanian competition council has ordered the owners to sell one of the three biggest Lithuanian breweries if they want to merge them into one company.

Ramm-Schmidt declined to comment on a possible price of the stake in Kalnapilis.

"Today I would not like to say for what price we are going to sell the company. We would like to see how much interest we can generate before deciding," he said at a news conference in Vilnius on Feb. 21.

According to data provided by the Lithuanian Brewers' Association, Svyturys and Utenos Alus sold a total of 101.29 million liters of beer and had a combined market share of 50.2 percent last year. Kalnapilis ranked third with a 19.9 percent share.

Ramm-Schmidt said that, taking imports into account, Svyturys' actual market share amounted to around 25 percent, and Utenos Alus' to 19.5 percent last year.

He provided no details about the group's investment plans in Lithuania, saying only that they saw stepping up the breweries' production capacity as the top priority, and that the size of investments would depend on market growth.

Decisions about the planned merger of the operations of the two companies Utenos Alus and Svyturys are yet to be approved by the competition council and the companies' shareholders. But it is already clear that the two breweries will operate as one corporate entity.

Svyturys is based in Lithuania's port city of Klaipeda, and Utenos Alus in the town of Utena in eastern Lithuania.

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