The History of Baltika Breweries

Baltika Breweries is:

  • a significant part of international company Carlsberg Group that made more than 13 billion dollars investment into the Russian brewing industry;
  • #1 on the Russian beer market since 1996;
  • one of the biggest FMCG companies in Russia;
  • 8 breweries;
  • about 7500  highly qualified professionals in different fields of knowledge;
  • the largest exporter of Russian beer in the world and the supplier of goods to more than 75 countries worldwide;
  • more than 50 national and regional beer brands (such as Baltika, Carlsberg, Tuborg, Zatecky Gus) and 8 non-beer brands (Seth and Riley’s Garage, for example)
  • the producer of “Baltika” beer brand – one of the three most valuable brands in Russia (Euromonitor 2014).

The history started in Saint-Petersburg

Baltika Brewery was constructed upon the project of Gipropischeprom-2 institute as one of the breweries of Lenpivo - Leningrad beer and non-alcoholic drinks production association. Construction of the brewery was started in 1978 and was followed by the establishment of state-owned Baltika brewery” enterprise after the construction was finished in 1990.

The first batch of beer was dispatched to the trade outlet in November 1990, when there were only 27 thousand liters of beer produced. The unified Baltika brand did not exist at that moment; the beer was produced under the well-known Zhigulevskoe, Rizhskoe, Admiralteyskoe, Prazdnichnoe brands.

1992 was a start of brewery privatization and it was reorganized in its legal form for open joint-stock company. 28 legal entities and more than 2000 individuals became the shareholders of Baltika. Baltic Beverages Holding AВ (BBH) – the Scandinavian holding formed by Hartwall (Finland), Pripps (Sweden), Ringnes (Norway) companies in 1991 for the purpose of investing into brewing industry in the countries of former Soviet Union – turned into the biggest shareholder and investor. Later on the companies became a part of Carlsberg and Scottish&Newcastle that shared the BBH assets equally (50% / 50%).

Meanwhile there was started the development of own Baltika trade mark. Baltika beer was supposed to become a beer of the highest European quality, brewed according to the traditional technology. Implementing this task management of the brewery worked out the first investment program of plant reconstruction and development. Owing to the implementation of this program Baltika turned into the first brewery in Russia equipped with the most high-tech European equipment.

1996 was a significant year for Baltika – from that time and on Baltika has been keeping a leading position in the Russian beer market.

Regional expansion

Baltika’s Regional expansion started in 1997 when there was a major share of stock of Donskoe pivo brewery in Rostov-on-Don acquired. Tulskoe pivo brewery also became a part of Baltika in October 1999. At the same time there was an investment program worked out by the departments of Baltika company which was aimed at capacities increase of the breweries acquired and the replacement of obsolete equipment. In 1998 “Baltika” also starts to establish the net of sales departments in the regions. Therefore Baltika Brewery OJSC name becomes irrelevant.

In 1998 shareholders approved the decision of the Board of Directors to change the name of the company for Baltika Breweries OJSC.

Meanwhile equipment upgrade of all the production sites of the company was ongoing. Thus in 1999 there was a construction of automated finished goods warehouse finished on the territory of Baltika brewery in Saint-Petersburg. The warehouse itself is unique in its system of high automatization and capability to perform unloading of goods into truck and railway transport.

Breweries construction

2003 - two new breweries of our company started up in Samara and Khabarovsk.

2008 – Novosibirsk brewery started up.

The pivot point

2006 became a pivot point in the history of our company when Baltika started to merge with Vena (breweries in Saint-Petersburg and Chelyabinsk), Pikra (Krasnoyarsk brewery) and Yarpivo (Yaroslavl and Voronezh breweries) brewing companies, whose major shareholder was BBH company as well.

The merger of 4 companies was a unique project for Russia from the point of view of its specificity, complexity and due dates. The procedure of merger was strictly performed in the accordance with Russian legislation and in full respect to the interest of all the four companies. Due to the clear coordination of actions of Baltika Vena, Pikra and Yarpivo shareholders, management and employees, as well as the open informational policy, the project was implemented according to the best international corporate practices. Actions aimed at integration of production, sales, distribution and administration performed during this period made our company the biggest FMCG producer in Russia and one of the biggest brewing companies in the world with the market share of more than 34,7%. The scale effect influenced the growth of sales volume and profit that increased more than 40% according to the results of the first quarter of 2007 already vs the same period of 2006, i.e. before the merger procedure was finished.

Since 2007 Baltika, Vena, Pikra and Yarpivo companies exist as one entity – Baltika breweries OJSC.

In 2009 there was one production site closed in Saint-Petersburg (ex Vena brewery) due to the surplus capacities in the region.

Baltika is a part of the international Group

In the 90-s of the 20th century ВВН implements business development strategy in Russia and takes part in corporatization procedures of some brewing companies (later on they will also become a part of Baltika Breweries). In 1992 BBH becomes a shareholder of Baltika with the share of 44%. The right to get the majority interest could be granted only in case of execution of the announced investment program, which was implemented ahead of schedule – by November 1996. Thus the Scandinavian holding became the holder of 50,6% of Baltika shares. 13,7% of shares passed into the ownership of Bossard – later on also took up by BBH also.

The beginning of 2000 was marked with a change of BBH holders – as a results the assets of holding were equally shares between Danish company Carlsberg Breweries AS (50%) and British company Scottish & Newcastle (50%). Thus in 2001 Baltika started the process of joining international Carlsberg Group, which started to take part in Company governance process via BBH.

In April 2008 Baltika became a part of Carlsberg Group in full, which became possible after Carlsberg bought out the assets of Scottish & Newcastle (S&N) company. Carlsberg got a possession of S&N share in BBH – major Baltika shareholder – and the assets of S&N in France, Greece, China and Vietnam. At this stage Carlsberg Group became the holder of 85% of Baltika shares, 15% of shares were left in hands of minority shareholders.

In November 2012 Carlsberg Group bought out the rest of the shares from minority shareholders and became the holder of 100% of shares of Baltika breweries OJSC. To make the corporate governance more handy in 2013 there was made a decision to change the legal form of the company from OJSC to LLC. This step became possible after consolidation of 100% of Company shares into the hands of one owner – Carlsberg Group. Reorganization into the LLC was finished in January 2014.

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