OREANDA-NEWS. On 23 May 2008 was announced, that a license agreement was signed in Tashkent between Baltika Breweries and the JV Sarbast Plus according to which Baltika grants to Sarbast Plus the right to produce and sell in the Republic of Uzbekistan beer made under trade marks belonging to Baltika. The license agreement provides for production of the beer varieties Baltika №3 Classicheskoye and Baltika №9 Extra. The first shipment of Baltika beer made at the Sarbast Plus facility will be brought to market before the end of the current year. In the time between the signing of the agreement and the launch of production, the Company will have to evaluate the volume of investment needed to further equip the JV Sarbast Plus, as well as discuss questions of joint distribution of the varieties produced in Uzbekistan.

Uzbekistan will be the third country where the Baltika brand is produced under license: beginning in December 2006, Baltika has been produced in Ukraine; and since April 2007, it has been made in Great Britain. The Company is planning to produce around 1.5 million dal of beer a year under license in Uzbekistan and to export beer produced in the JV Sarbast Plus to Kyrgyzstan and Tajikistan.

Anton Artemiev, President of Baltika Breweries, commented on the license agreement as follows:

"Last week we signed a contract to buy a brewery in Azerbaijan, and today we reached agreement with respect to licensed production in Uzbekistan. Our choice is not accidental: the Sarbast Plus company has new and up-to-date production and can meet world standards of brewing. A well developed legislative basis and the high potential for economic development of Uzbekistan make this country’s market an attractive one for us. In our estimation, growth in the beer market of the Republic will maintain a pace of 11-14% per year over the coming three years. Given the existing excise tax of \\$1.00 per litre on imported beer, production of our beer varieties within the country will make it possible to lower the cost of our products and thereby to make them more affordable to consumers."

The selection of the varieties Baltika №3 Classicheskoye and Baltika №9 Extra resulted from their popularity in Uzbekistan and in the Central Asian region as a whole. In 2007, numbers three and nine in the Baltika line-up accounted for 52% of the Company’s total sales in Uzbekistan. The parties to this agreement are examining the possibility of increasing the number of varieties of Baltika beer that will be produced under license: the list may eventually include Baltika №7 Export beer, Baltika №5 Gold and Baltika Cooler, which together amounted to 41% of the Company’s sales in Uzbekistan in 2007.

Baltika Breweries has been delivering its products to Uzbekistan ever since the year 2000 and it is the leading importer of beer into the Republic. Today the entire line-up of the Baltika brand is on sale in the country, as well as Nevskoye, Arsenalnoye and the licensed brand Сarlsberg. The Company’s sales in Uzbekistan in 2007 more than doubled compared to results in 2006.

Baltika brand beer is sold in 47 countries around the world and is ranked second in Europe in terms of sales. Baltika is no less popular among consumers in Uzbekistan, as we see from awards the Company has won there. In 2007 alone, Baltika was the winner of the prize "Choice of the Year-2007" in the category "Best Imported Beer" and "Best Beer of the Year" in the Republic of Uzbekistan (Prize of the Tashkent Beer Festival, 2007).