Stumbras products off shelves, into Latvia

  • 2003-12-04
  • From wire reports
VILNIUS - Stocks of Stumbras alcoholic beverages have been diminishing quickly in Lithuanian shops, and new supplies are not arriving, shop owners said. According to analysts, the breach in supplies is due to new negotiations launched by Stumbras with major retailers.

Stumbras' new shareholder, alcohol wholesaler Mineraliniai Vandenys, is apparently offering distributors and retailers different terms of distribution, yet the new terms have not been welcomed by everyone.
While talks continue, the supply of Stumbras beverages in some major supermarkets is shrinking, ceding shelf space to rival producers, shop owners said.
"We are for negotiations, but when they start telling us what to do, then we do not want to have anything in common with such suppliers," said Dainius Dundulis, a board member of Norfos Mazmena.
Arturas Listavicius, chief executive officer of Stumbras, confirmed that supply contracts with the main distributors of the distillery's products have been revised in the past several weeks.
"Some distributors are more forthcoming than others. Wholesalers bought fewer Stumbras products during the negotiations, so overall sales have declined a little," Listavicius admitted.
However, he stressed that the talks were over with the major wholesalers, and that agreements with the remaining ones, including the giant VP Market, were expected in the coming few weeks.
In the meantime Stumbras said it planned to start exporting alcoholic beverages to Latvia.
Though the first delivery will reach the neighboring country by next week, distillery officials said they would wait until the beginning of next year to elaborate their marketing strategy for Latvia.
The shipment will take place in cooperation with Park MV, a daughter company of Stumbras. Products of three kinds - Kosher vodka, Trejos Devynerios and Starka - will be delivered with Latvian-language labels.
Through Park MV Stumbras is already negotiating supply agreements with Rimi and VP Market supermarkets, as well as other trade networks.
The trade and marketing director of Stumbras, Arturas Kazlauskas, told the Dienas Bizness daily that 97 percent of Stumbras' production was sold in the local market and up until now the company had not had a definite marketing strategy. The company is therefore undergoing a major review, and in the next two to three months goals for expanding into neighboring markets will be set.
Mineraliniai Vandenys, an alcohol wholesale company owned by MG Baltic Concern, started managing Stumbras three weeks ago after winning the Stumbras privatization, offering 152 million litas (43.4 million euros) for the 91.95 percent stake.
Last week Stumbras' new management was criticized for lending some 70 million litas - cash on hand that the company had before the privatization - to an unknown third party, leading many to believe that the privatization winner was financing its purchase using the company's own funds.