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Baltika and Carlsberg Group Executives Discuss Challenges and Issues in Regulation of Brewing Industry at SPIEF-2019

Cees 't Hart, President and Chief Executive Officer of the Carlsberg Group, and Lars Lehmann, new President of the Baltika Breweries, Carlsberg Group's Executive Vice President for the Eastern European region, held official meetings with the heads of several regions and top managers of a number of major Russian and international companies at SPIEF. The panelists discussed the key trends in consumer market regulation, latest legislative initiatives that could affect the development of the brewing industry, and outlined the next steps for further interaction.

As the leader of the Russian brewing industry and one of the largest taxpayers and employers in the regions of its presence, Baltika advocates the effective interaction between businesses and authorities. Once again, the Company used the SPIEF platforms for productive meetings with governors of Russian regions and top managers of major Russian and international companies, and discussions of further collaboration prospects.

Within two days of the Forum, Baltika’s new President Lars Lehmann held business meetings to get acquainted with governor of the Pskov Region Mikhail Vedernikov, governor of the Samara Region Dmitry Azarov, governor of the Yaroslavl Region Dmitry Mironov, governor of the Tula Region Alexey Dyumin, governor of the Rostov Region Vasily Golubev, governor of the Khabarovsk Region Sergey Furgal, governor of the Novosibirsk Region Andrey Travnikov, and also deputy governor of the Voronezh Region Vitaly Shabalatov.

The participants of these meetings noted the importance of a well-established constructive dialogue between the industry and government authorities on regulatory issues and discussed key trends that have emerged in the brewing industry over the past few years. Lars Lehmann said that the Russian beer market grew in 2018 for the first time in 11 years. According to Baltika, the growth was 3%, which was facilitated by the absence of additional legislative restrictions, favorable weather conditions and the FIFA World Cup in Russia.

According to the President of Baltika, in order to maintain this positive trend in the industry, it is necessary to prevent a number of legislative initiatives that may affect it. These include the introduction of labeling for brewing products, which is perceived by the business community as a radical and, at the same time, not sufficiently efficient measure, especially with regard to combating the shady market of low-alcohol products.

The parties agreed that the regulatory measures should not be excessive for legal businesses and must help prevent illegal trafficking in the regions. According to the President of Baltika, the experience of introducing restrictions at the federal and regional levels suggests that tightening legislation does not change behavioral habits of consumers.

The meetings’ format allowed the participants to further discuss the growth prospects of Baltika in the regions of presence and consider the issues and concerns of each of the parties for even greater integration of the brewers into the local economies. The agreements signed at SPIEF will stimulate the interaction of Baltika with regional authorities and contribute to the further development of mutually beneficial joint projects.

For example, Lars Lehmann and Rostov Region Governor Vasily Golubev signed a cooperation agreement for 2019-2021. The document’s provisions include the development of cooperation in the socio-economic issues of the region, maintaining a favorable investment climate, preserving jobs and promoting employment in the Rostov Region, building conditions for doing business and encouraging investment activity, as well as implementing environmental policies and measures to enhance drinking culture and responsible drinking. An agreement on partnership in organizing the International Hanseatic Days festival was signed at a meeting with the governor of the Pskov Region, Mikhail Vedernikov.

In continuation of the dialogue with representatives of state authorities, Cees' t Hart, President of the Carlsberg Group, took part in a meeting with First Deputy Prime Minister of the Russian Federation Anton Siluanov. One of the topics of this discussion was the prevention of additional administrative burden on the industry. Cees' t Hart stressed that the industry’s representatives understand the state task to increase the transparency of the beer market, while noting that decisions on the industry’s regulation should not increase the pressure on fair businesses that pays excise taxes without fail.

Top managers of Baltika and the Carlsberg Group also met with representatives of major Russian and international companies at SPIEF-2019. Lars Lehmann, Cees' t Hart and Anders Bering met with non-alcoholic beverage producers: General Manager of Coca-Cola in Northern and Eastern Europe Dusan Stojankic, and PepsiCo President Europe and Sub-Saharan Africa Silviu Popovici. The parties discussed initiatives in the regulation of the non-alcoholic beverage market.

The transition to a closed-cycle economy and the issue of reducing PET package waste were discussed at a meeting of Lars Lehmann and Dmitry Datsina, Chairman of the Board of Directors of the Europlast Association. The President of Baltika spoke about the Company's sustainability initiatives, strategic goals for reducing the carbon footprint of products, recycling and re-using PET bottles. Lars Lehmann stressed that Baltika is interested in developing the use of PET packaging and doing it responsibly, while taking care of the environment.

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Baltika Breweries, part of the Carlsberg Group, is the leader of the Russian beer market, one of the largest producers of mainstream consumer goods in Russia. Baltika owns 8 breweries in Russia, and delivers a vast brand portfolio. The company is a significant part of the Carlsberg Group and its Eastern Europe region that also includes Azerbaijan, Belarus, Kazakhstan, and Ukraine. Baltika Breweries is the leading exporter of Russian beer, with the company's products being offered in more than 75 countries. Due to their high quality, Baltika brands have won more than 670 Russian and international awards of professional and consumer competitions. Learn more about Baltika Breweries on the company's website or on its official VKontakte page.

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