Beer Production Grows 26% yoy In 3M07

Beer production increased 25.5% yoy in 3M07 to 55.3 mln dal, according to Ukrainian News. In March alone production rose 37.8% mom to 22.6 mln dal. Concorde Capital: Strong growth in 1Q06 signifies that overall growth of Ukraine’s beer market might be higher than the 5-6% projected by Ukrpyvo (Ukraine’s beer association). Out of the three market leaders, we expect BBH (which owns Slavutych (SLAV: HOLD) and Lvivska Pyvovarnya) to be the most active in boosting output this year. The company plans to increase capacity at its Zaporizhya plant, and has recently received a USD 97 mln loan from the EBRD, part of which will be spent for this purpose. Sun Interbrew (SUNI: BUY) and Obolon, each holding close to a 35% market share, are likely to bet on pricing – while concentrating on the premium beer segment.