OREANDA-NEWS. August 23, 2007. A strategy for developing further the domestic brewing industry was the subject of the meeting held by President of Belarus Alexander Lukashenko on August 23, reported the Presidential website http://president.gov.by.

Opening the meeting, the Head of State identified its aim in the following words: “It is now important for us to decide whether we should attract foreign companies in this highly profitable business or develop this industry ourselves.”

At present, there are 12 brewers in Belarus, both in private and public ownership. However, some 97 percent of all beer produced in Belarus is made by only six of them. Under the brewing industry development programme for 2006-2010, it is planned to expand the industry’s productive capacity from 46,3 million dkl in 2005 to 64,1 million dkl by 2010 and increase the production of beer from 27,2 million dkl to 60 million dkl respectively.

The productive capacity of the domestic breweries is currently not enough to meet the rapidly growing demand for this beverage in Belarus, Alexander Lukashenko said. In this respect, there is a need to revamp the facilities, all the more so because the companies have highly-qualified professionals who can do it, he added.

During the meeting, experts voiced their opinions on how to address the issues faced by the domestic brewing industry.

Nearly all Belarusian breweries now face big bills payable and a shortage of funds, which are the factors hampering their further growth. But the potential for boosting domestic sales is really huge as the domestic beer consumption rises by 20 percent every year; the demand is growing steadily. The Government, as a way of tackling this issue, proposed that Belarusian breweries be privatised by foreign companies, but on certain conditions. The conditions included preserving the specialisation of the Belarusian companies concerned, their brands, safeguarding the jobs, boosting beer exports, investing in production growth, utilising Belarusian raw materials and some other.

The President said the state had everything necessary for revitalising the brewing industry itself without resorting to the privatisation. “To reach the most advanced level, like at the Krinitsa JSC, we need around $125 million. Just $125 million to modernise the entire sector, to have the beer we want! These funds are not big, all the more so because this money will pay back in time,” Alexander Lukashenko said. According to him, now the breweries have good feedstock; the quality of home-grown barley is continuously improving; Belarus has enough barley of its own for producing beer; the country, hence, has no need to import it. Moreover, investing $15-16 million in malt production will make it possible to double the output of malt within two years and fully satisfy the growing demand of the domestic breweries in this product. The state has enough financial resources for this.

Drawing the conclusions from the discussion, Alexander Lukashenko said that the Belarusian breweries were strong enough to compete effectively with foreign companies at home, and, therefore, there were no compelling reasons for making a prompt decision to sell virtually the entire industry. “As yet, we have no such situation that could force us to make a decision, in a like-a-house-on-fire manner, to sell the companies. Why are we so hasty? Let ’ s put this industry in good order first . To sell is the simplest way. But it is not until I am fully convinced that this decision is the right one that I will be able to take it,” the Head of State said.

Alexander Lukashenko gave instructions to the participants of the meeting to find common ground as to the subject of the discussion and, in the first ten days of September, to submit to him their proposals furnished with the drafts of the relevant regulatory acts.