Going Global Case Study

BBH: The Russian Venture of the UK Brewer, Scottish & Newcastle

OR

Abstract:
Maturity, stagnation and decline in beer consumption in Western Europe and North America forced Scottish & Newcastle, an UK Brewer, to foray into the emerging Russian market by forming Baltic Beverage Holding (BBH), a 50:50 joint venture with Carlsberg Breweries, a prominent Danish brewer. BBH rode on the wave of rising disposable income of the Russians, coupled with a shift from vodka to beer drinking, to become the leader in the Russian brewing industry with a market share of 36%. However, it is opined that the company would be facing a challenging future given the forecasted decrease in beer consumption in Russia after 2007 and government regulations like ban on TV advertisements of beer to contain juvenile alcoholism.

Pedagogical Objectives:

• To discuss the emergence, growth and forecasted maturity of the Russian beer market
• To discuss the market entry and growth strategies adopted by BBH in the Russian beer market.

Contents:

• The Russian Beer Market
• Scottish & Newcastle and the Inception of BBH
• BBH in Russia

Keywords : Russian beer market; Consolidation of Russian beer market; Scottish & Newcastle; Carlsberg Breweries; Baltika Breweries; Market entry strategies; Market Entry Strategies Case Study; Growth strategies; Inorganic growth strategies; Statistics on consumption of beer in world; Arsenalnoye; Baltika; Baltika No 7; Baltika No 5