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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Beer Games With Foreign Capital

10 April, 1999 - 00:00

Belgium's Interbrew and multinational Sun Brewing announced that they have
joint strategic plans in the CIS.

The joint venture, Sun-Interbrew, their brainchild, will be in the usual
brewing business, and will also produce malt and soft drinks in Russia
and Ukraine. Company experts expect the combination of Sun Brewing's many
years of operation on Russia's regional market and Interbrew's professional
experience, along with their 34% interest in Sun-Interbrew each, to make
the latter a leading brewer in Russia and Ukraine.

It is hard to disagree with the experts. Interbrew is to contribute
$40 million to the joint venture, plus a controlling interest in such local
breweries as Rosar (Omsk, Russia) and Yasna (Chernihiv), also maybe Rohan
(Kharkiv). Sun Brewing owns breweries in St. Petersburg, Perm, Ivanovo,
Kursk, Saransk, and Volzhsky.

Independent experts, however, voice their concern: the new player could
well monopolize the Ukrainian beer market by manipulating prices, which
would be unfair but quite effective.

Serhiy Plashchenovych, chairman of the board, of Obolon, the publicly
held joint stock company, told The Day that the company being established
will not be Ukrainian and asked rhetorically, "Would Belgium allow its
beer output to be controlled by any foreign company? Foreigners are always
careful to protect their interests back home. Perhaps we should follow
suit. They will never let us into the German beer market. Well, I work
for Obolon, so it is difficult to discuss the subject. The people in charge
of running the economy should comment. It's within their competence."

The Day contacted Vasyl Struk, deputy head of the Antimonopoly
Committee of Ukraine. "There is no direct evidence pointing to any transgressions,
but the overall impression is that of foul play, for their assets are rather
sizable. If their total amount exceeds $12 million there is an obvious
transgression, for they were supposed to get the commission's permission
first. All this has to be checked, of course."

 

Ukrainian producer, protected on paper only, may end up offside
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