In order to counter the decline of their success on the Russian market, Belgian beer giant AB InBev has placed its activities in Russia in a joint venture with Turkish Anadolu Efes.
Equal shares, but Efes gets operational upper hand
The joint venture was established several months ago, writes Belgian newspaper De Tijd, indicating that Russia disappeared from the quarterly results of the Belgian-Brazilian brewing giant in the second quarter. “AB InBev and Efes both control half the company, but the Turks are in control” writes the business newspaper. However, AB InBev does receive dividend from the joint venture.
According to ABN Amro-analist Robert Jan Vos, “Russia no longer is a core market for AB InBev.” “By working together Efes and AB InBev increase their scale, giving them more power and possibilities to cut costs. AB InBev enjoys scale advantages without actively contributing” he says in the newspaper.
AB InBev has seen its sales drop for years in Russia, as the government stepped up in the battle against alcohol abuse, imposing measures like an embargo on alcohol advertising and a vast increase of duties on alcohol. AB InBev’s successful tactic in China - a more exclusive image (with Stella Artois and Budweiser) – did not work for Russia. AB InBev had a market share of 13,9 % in Russia and was number two (just before Efes), but far behind Danish Carlsberg's market share of 40%. Since the acquisition of SABMiller in 2016, the Belgian brewing giant has had a minority interest of 24 % in Anadolu Efes.