Lithuania's Kalnapilis splits away

VILNIUS - The Lithuanian brewery Kalnapilis, controlled by the Scandinavian concern Baltic Beverages Holding, started to operate independently as of May 7. Meanwhile, its former sister brewery Svyturys, based in the port city of Klaipeda, will join the distribution system of beer marketer Jungtinis Alaus Centras.

"On May 7 we'll start taking Svyturys' production to JAC, which will begin distributing it next week", Tomas Kucinskas, managing director of JAC, told the Baltic News Service agency.

Lithuania's Competition Council allowed Svyturys to join JAC on condition that the Kalnapilis brewery is separated from the Klaipeda company.

The Danish brewery Carlsberg, which controls Svyturys, and BBH were merged earlier this year. The competition council allowed concentration on the Lithuanian beer market only if one of the three largest breweries – Kalnapilis, Svyturys or Utenos Alus – would be sold.

In February, BBH announced it would sell an 86.6 percent stake in Kalnapilis, expected to happen not later than this coming autumn.

Kucinskas said that in the future one company, which would produce Svyturys and Utenos Alus, would be established instead of JAC.

"After we sell Kalnapilis, there will be no obstacles for Svyturys and Utenos Alus to merge," Kucinskas said.

The Lithuanian beer market rose by 5.9 percent in the first four months of this year versus the same period in 2000. Data for April showed a year-on-year increase of 3 percent.

According to data provided by the Lithuanian Brewers' Association, eleven breweries, members of the association, sold a total of 57.03 million liters of beer during the first four months of 2001, compared with 53.83 million liters in the same period last year.

In April this year, total beer sales increased to 17.26 million liters, from 16.75 million liters a year earlier.

Svyturys sold 18.03 million liters of beer from January through April this year, a 22 percent increase year-on-year.

Utenos Alus, meanwhile, reported a 33.1 percent drop in sales for April and a 26.6 percent decline in its four-month sales. The company sold 9.97 million liters of beer in the January-April period this year, including 2.89 million liters in April.

Kalnapilis sold 2.75 million liters in April, a 29.1 percent decrease year-on-year, bringing its total four-month sales to 8.94 million liters, down by 18.7 percent.

Vilniaus Tauras, Lithuania's leading producer of strong beer, boosted its April sales by 64 percent, year-on-year to 2.87 million liters. Its four-month sales surged by 56.6 percent to 8.63 million liters.

Siauliu Gubernija's April sales soared by 89.6 percent. Its four-month sales reached 4.30 million liters, up by 71.3 percent year-on-year.

Ragutis, controlled by Estonia's A. Le Coq, which is owned by the Finnish brewery Olvi, sold 1.42 million liters of beer in April, an increase of 23.5 percent over one year.

This year, Svyturys had a market share of 31.6 percent, followed by Utenos Alus with 17.5 percent, Kalnapilis with 15.7 percent, Vilniaus Tauras with 15.1 percent, Gubernija with 7.5 percent and Ragutis with 8.1 percent.

The Lithuanian breweries exported 24,000 dekaliters of beer in the first four months of this year, up 1.7 times from 14,000 dekaliters in the previous year. According to the data provided by the Lithuanian Brewers' Association, the brewery Gubernija, based in the central Lithuanian town of Siauliai, ranked first in terms of exports. In the January-April period the company exported 20,000 dekaliters of beer, while this figure last year stood at 13,000 dekaliters. Gubernija exported mostly to Israel (36 percent of the total output) and the United States (25 percent).

"Competition on the domestic market is severe and we can produce much more than we sell in Lithuania," said Raimundas Borusas, the company's sales director.

This year Gubernija's exports should constitute 8 percent of total sales, Borusas said.

The breweries Vilniaus Tauras and Utenos Alus exported 3,000 dekaliters and 1,000 dekaliters of beer respectively, according to the Lithuanian Brewers' Association.

In 2000, the Lithuanian breweries exported 75,000 dekaliters of beer, up 41.5 percent versus 1999.

Over the past few years, however, Lithuanian beer exports have dropped considerably. In 1997 the exports totaled 573,000 dekaliters of beer; in 1998 it was 162,000 dekaliters; while in 1999 this figure stood at just 53,000 dekaliters.