Price war pushes beer into plastic bottles

  • 2004-03-11
  • By Kristjan Teder
TARTU - Estonian breweries are introducing plastic beer bottles in a bid to lure back thrifty consumers who have been buying up cheap Russian and Ukrainian imports.

This emergence of plastic - polyethylene terephthalate, or PET - bottles echoes the trends in neighboring Latvia, where 70 percent of all beer is sold in plastic containers, and Russia.
To be sure, the "plastic invasion" actually started in 2002 and developed rapidly last year, when the market share of PET-bottled beer rocketed to some 14 percent - a huge leap compared to the former 2 percent-3 percent that was mostly attributable to cheap Russian imports.
Ukrainian-made Obolon started the rally, and its PET-bottled beers took the local market by storm, conquering some two-thirds of the imported beer segment of the market.
"Plastic-bottled Obolon was on the way up for a long time, but its share has now fallen dramatically," said Kristina Seimann, spokesperson for Estonia's largest brewery, Saku, whose President beer has taken a quarter of the PET market since the plastic bottles were introduced last October.
According to data from the Estonian Beer Producers Association, plastic bottles accounted for 14 percent of the 97 million liters in 2003 sales. The figure has further increased in recent months, putting PET beer ahead of canned brew, which had a 15 percent market share in the previous year. Another 7 percent was sold in kegs, while traditional glass bottles made up the remaining 64 percent of the total.
According to some forecasts, plastic beer containers could eventually grab as much as 50 percent of the Estonian market.
"The market share of low-price beers increased in 2003, as did the share of beers with high alcohol content," said Seimann. "This has also led to an increasing use of non-reusable packages, notably plastic."
The plastic bottle business is lucrative, as the cleaning, preparing and processing of redeemed glass bottles makes up as much as a third of all production costs. Using one two-liter PET bottle instead of four ordinary glass bottles would allow producers to slash prices by 20 percent - 25 percent.
The rapid changes have forced Tartu Brewery, the second largest in Estonia, to go plastic as well. Although the company's executives have previously criticized PET bottles as a blow to quality, it recently launched its own plastic beer line amid fears of losing market share.
The country's third largest brewery, Viru Olu, is also heavily reliant on plastic bottles, as are most small producers.
Experts agree that plastic bottles are no match for glass or metal containers when it comes to their storage qualities. Plastic has a low oxygen and light barrier, allowing both to penetrate the bottle to oxidize the beer, thus changing its taste and properties.
Beer lovers have mixed feelings about the new plastic trend. Traditionalists feel convinced that PET bottles are an insult to tradition and are intended for people whose sole purpose of drinking is to get drunk.
"The sound of the bottle cap popping off, the sensation of cold glass in your palm - it is all an important part of enjoying your brew," said Siim Sikk, a beer lover from Tartu. "With a plastic bottle the magic and rituals are lost. And you can tell the [plastic-bottled] beer by its taste, as you can tell canned beer. Neither are as good as beer from a bottle or a keg."
Other drinkers disagree, pointing out that the new bottles are light, unbreakable and can be recapped if you don't feel like having it all at once.
"When fishing in a boat or just walking in the woods, plastic bottles are irreplaceable - you can drink a little, shut it and keep on doing what you are doing, with no need to worry about your bottle tipping or crashing," explained Denis Ivanov from Narva-Joesuu. "Also, I think the bad taste thing is untrue, one would have to be a real connoisseur to ever know the difference."
While drinkers argue about style and taste, environmentalists are wary of the conquest of plastic bottles for their own reasons: PET containers are virtually indestructible in the nature and, when left behind, can litter remote forests or beaches for decades. To rectify this situation, Estonia plans to introduce a Scandinavian-style system by which the consumer shall pay a deposit of up to 3 kroons (0.20 euros) per bottle or can, which shall be refunded when the package is returned for recycling.