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Stabilisation in Russia boosts Beluga Group profit by 79%
Russian spirits producer and importer Beluga Group saw its net profit reach R229 million (US$3.9m) in the first quarter of the year – “largely” due to improvements in its domestic market.
Beluga Vodka saw export sales exceed its shipments in Russia for the first time in H1
The firm – which changed its name from Synergy Group in June 2017 to strengthen its position as an international business – achieved export sales growth of 35% led by flagship vodka brand Beluga, which saw exports exceed Russia shipments for the first time.
The company also upped its import operations, increasing distribution of its import brands by 34%. Beluga Group remains the exclusive distributor of William Grant & Sons range of products in Russia after extending the contract for a further five years during H1.
Beluga Group’s key brands include vodka brands Veda, Myagkov, Belenkaya, Russian Ice, and Gosudarev Zakaz, and Golden Reserve brandy.
Beluga Group’s CEO, Alexander Mechetin, said: “In H1 2017 the group continued sales increase of its own and partner products, taking up the top position in the market and keeping up the positive development trend, demonstrating the good dynamics of its incomes.
“A great influence on those indicators was largely due to the improved situation of the market, which stabilised after the state had made major advancements in its struggle against shadow market. Another reason was the rate of excises, which remained unchanged this year.”
Alcohol segment revenue, however, dipped by 4% in the period, as a “direct consequence” of changes in the regulation of trading activities in Russia.
“It is worth noting that the decrease of alcohol segment revenue is based not on the economical matter, but is the consequence of the change in the revenue and expenditure structure,” added Mechetin. “The distributional expenses from operations in retail chains have also gone down.
“These changes do not influence operational profit. It is direct consequence of the new Trade Law, which established more straightforward rules of cooperation for producers and retail companies. It is also expected to affect the industry in a positive way.”