Baltika enters the Argentine market

june 1, 2016

Arsenalnoye Traditional beerBaltika Breweries, part of the Carlsberg Group, began shipping beer to Argentina, thus being the first Russian producer whose products appeared on the shelves of the Argentine’s stores. The first batch amounted to 13,000 liters of beer.

It was decided to start developing the new market with the Arsenalnoye Traditional beer packaged in 0.47 l bottles. Arsenalnoye will be first distributed in Buenos Aires – the capital of Argentina and then will be available throughout the country with sales focused mainly in major cities.

It is worth noting that Baltika’s export successfully develops in the Latin American market in general. This market is characterized by domination of local producers. In 2015, company’s sales in this region increased by 26% year to date. Now, company’s products are supplied to 11 countries of the region: Brazil, Guatemala, El Salvador, Colombia, Cuba, Mexico, Uruguay and many others. Chile, where the Arsenalnoye brand already has already gained the successful reputation, is of particular note – the country is a major contributor to the total volume, as well as Costa Rica and Paraguay, where our brands appeared last year. Baltika’s beer brands are sold in such well-known retail chains as Walmart, Carrefour, Jumbo and many others. It is noteworthy that main consumers in this region are locals, rather than immigrants from the former Soviet Union.

Argentina is the Latin America’s largest beer market. Beer consumption in Argentina continues to grow and already exceeds wine consumption. At the same time, Argentina is rightly considered to be the one of the most complex markets in Latin America in terms of registration and currency transactions. This is due to several reasons. Firstly, protectionism policy. From 2007 to 2015 the imports had been levied with extremely high taxes and were disadvantageous to foreign producers, furthermore there were restrictions on currency purchase and export of foreign exchange earnings by all natural and legal entities. After the presidential election of 2015, political and economic situation in the country has changed, now export is possible. That is why, recognizing potential for sales development in Argentina our company can enter the market just now. Moreover, collection and examination of documents necessary for beer certification and registration in Argentina took more than a year.

Secondly, registration of Baltica trademark – beer of local producers – in Argentina made it impossible to launch the flagship brand “Baltika”.

Elena Kuzmina, head of export legal support and intellectual property department: “In some Latin American countries we faced with the fact that there is a trademark (Baltica) historically owned by local breweries and identical to the name of our traditional export brand “Baltika”. But in Brazil, for example, we have successfully registered the trademark in our name. In other countries, the issue concerning registration is considered by local authorities, and we have started developing other our brands. We have registered the Arsenalnoye trademark in Argentina that gives us opportunities to commercially develop this brand and, if necessary, enables us to protect it adequately”.

In such situation the Arsenalnoye Traditional best fits the market requirements, where lager is the undisputed leader occupying 98%. In addition, Arsenalnoye is positioned as premium beer in the Latin America, and considering consumer preferences of more expensive beers, our brand has a good chance to grow actively.

Entering the Argentine market is just one of Baltika’s new countries development achievements for the past six months. In 2016, our company also started exporting the range of Baltika 0 malt beverages to Pakistan, Baltika 7 permanent flagship, Baltika 9 strong lager and the range of Baltika 0 non-alcoholic malt beverages to Burkina Faso.

Elena Volgusheva, export sales director: “Increased number of countries where you can find Baltika’s products helps us to strengthen our position as a leading Russian beer exporter. Launching shipments to Argentina is a big and very promising step, because the country is one of the twenty largest beer markets in the world. Beer is the most popular alcoholic beverage there occupying 60% of the entire alcohol market. Beer consumption per capita amounts to 53 liters per year in that country. Though the share of imports is very small today, we expect share growth of imported brands in the country due to liberalization of foreign exchange, thus, it is important for us to take a good position there at the very start”.

Move Up