Russian brewers tap local market for hops as foreign supplies dry up

Anadolu Efes Biracilik ve Malt Sanayii

13/09/2022 13:15

* This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine

    MOSCOW, Sept 13 (Reuters) - Restrictions against Russia have
disrupted local beer brewers' supplies of hops and equipment,
forcing them to seek domestic alternatives as they strive to
keep their range of beers flowing, three brewing companies told
Reuters. 
    Supply chain disruptions, sanctions over Moscow's actions in
Ukraine and some Western firms choosing to halt supplies to
Russia have combined to reduce brewers' access to U.S. and
European hops, but as foreign competitors vacate the market,
some Russian firms see an opportunity. 
    Sergei Baranov, head of Russian brewing company Khmelyoff
said they have used German hops for 15 years, but this year
trialled hops from Russia's Chuvash Republic, a region around
585 km (365 miles) east of Moscow.
    "In principle we are happy with the quality," Baranov said,
adding they would order more.
    He said logistics and payment problems meant Khmelyoff could
not pay its partners in Germany directly, even though deliveries
of hops have not been sanctioned. 
    Russia, which imports the vast majority of its hops from the
likes of the United States, Germany and the Czech Republic, does
not produce a wide enough variety of its own hops to brew more
sophisticated types of beer, Vyacheslav Vetelev, founder of
LaBEERint Brewery, told Reuters. 
    "We can't brew the same types of beer that our consumers are
already used to, only Chuvash hops," said Vetelev, who has used
hops from the United States, England, Germany, New Zealand and
Australia.   
    Vetelev, who described Russian entrepreneurs as "iron
people", given the almost annual challenges they face, said
Russia needed to develop the hops varieties it produces. 
    "This will take years, it won't happen overnight."
    
    SILVER LINING
    While craft breweries struggle to adjust, some larger
players see opportunities as the market transitions, such as
Afanasy, a large brewer located in Tver, about 160 km (100
miles) northwest of Moscow. 
    "Now our direct competitors have left and there is more
shelf space for us, and consumers are already turning their
attention to our product," said General Director Vadim
Deshyovkin. 
    Foreign brewers Carlsberg  CARLb.CO  and Heineken  HEIN.AS 
have stopped producing their flagship brands in Russia, while
Anheuser-Busch InBev  ABI.BR  is seeking to extricate itself
from a joint venture in Russia with Turkey's Anadolu Efes.
 urn:newsml:reuters.com:*:nL8N2YU4QU
    Deshyovkin acknowledged that Afanasy is currently facing
difficulties, but is building new supply chains, seeking new
partners, and its Tver factory is operating at close to full
capacity, producing nearly 10 million decalitres per year.
    "I am sure that we will overcome (the difficulties) in the
coming year," Deshyovkin said. "We will adjust our business
processes for supplying missing components or raw materials and
then will emerge from this current crisis successfully." 
    According to federal statistics service Rosstat, Russia
produced 410 million decalitres of beer in January-June 2022, up
2.7% year on year. 
    

 (Reporting by Reuters, Writing by Alexander Marrow, Editing by
Alexandra Hudson)
 ((alexander.marrow@thomsonreuters.com))