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Home | News | Breweries | Efes makes second Russian cut

Efes makes second Russian cut

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Rostov brewery to shutter in Q1 2014

Anadolu Efes is to shutter a second brewery in Russia as it comes to terms with overcapacity in its production network.

Rostov will have its operations suspended in the first quarter of 2014. Efes places its capacity at one million hectolitres, accounting to five per cent of its Russian brewing capacity. Its beer volumes will be reallocated amongst Efes’ six remaining breweries in the country.

The announcement is hard on the heels of a decision by Efes last month to close its 4mhl brewery and malting operations in Moscow as of 1st January 2014. 

The Turkish brewer is looking to optimise its production network in light of difficult market conditions. It estimates there has been a 20% contraction of the beer market over the past five years, which it attributes to Russia’s tightened regulatory regime.

In November Efes Breweries International reported a 6.9% proforma decline in third quarter volumes to 5.2mhl. For the first nine months of the year volumes dropped by 14.0% compared to the same period in 2012. 

A restructuring of the Russian production network has been anticipated for some time. The possibility was flagged by departing Efes Beer Group president Alejandro Jimenez in May when the company’s first quarter results were announced. Capacity utilisation was then estimated at just 60% across its eight Russian breweries.

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