Moscow brewing company will launch beer production under the Yichang brand

The growth in supplies of Chinese beer to the Russian Federation may stimulate the interest of local brewers in producing local brands in a similar style. Thus, the Moscow Brewing Company will launch the production of beer under the Yichang brand, which is currently brewed in Kazakhstan and is positioned as associated with the PRC. Localization will reduce costs, but the current interest in Asian-style beer does not promise big sales, market participants warn.

In December 2023, the Moscow Brewing Company (MPC) received a declaration of conformity for the production of beer under the Yichang brand, according to data from the Federal Accreditation Agency. Light beer under this brand with a strength of 3.8% is today produced at the First Brewery in Kazakhstan. As stated on the company’s website, the drink is brewed with the addition of rice, “following the traditions of brewing in China.” The MPK told Kommersant that they plan to launch production of Yichang beer in the second quarter of 2024. The brand belongs to the First Brewery, the IPC added, refraining from other comments. The Kazakh company did not answer Kommersant’s questions.

MPC was launched in 2008 by Evgeny Kashper and Alexander Lifshits, the creators of Ivan Taranov Breweries. The company operates a plant in Mytishchi with a capacity of 80 million decaliters per year, where it produces Zhiguli Barnoye, Khamovniki, Trekhgornoye, etc. It also imports and bottles international brands under license. In the First Brewery, according to the company’s reporting, the structure of Mr. Kashper and the Lifshits family, Echelon Systems Ltd, owns 50.01%. More than 49% belongs to Saula Algazieva, whom Forbes called the co-owner of Qazaq Banki, which is currently in the process of liquidation.

Nikolai Zhelagin, founder of the “Taking a Day Off” beer store chain, notes that the presence of Chinese beer on the Russian market has become more noticeable in the last year, which is why brewers might be interested in launching local “Chinese-style” drinks. In the spring of 2023, MPC itself announced the start of importing Chinese Tsingtao beer, and in the fall announced the expansion of the line under this brand (see Kommersant, December 13, 2022). According to Chinese customs statistics, in 2023, beer supplies from China to the Russian Federation almost doubled year-on-year, to 21 million liters. Yichang beer from Kazakhstan is also sold in Russia. The drink is available in the Krasnoe & Beloe chain for RUB 79.99. per bottle 0.62 l. As Mr. Zhelagin notes, brand sales may show sufficient dynamics to think about localization.

MPC competitors are also adding “oriental style” beer brands to their assortment. United Breweries (UBB) last year launched Okome, a rice-infused beer with a nod to Japanese tradition on the can. Stanislav Kaufman, owner of the Kaufman brand agency, says that intense competition forces brewers to constantly look for new options to expand their range. Chinese beer, he notes, has fans all over the world, and the localization of drinks in this style in the Russian Federation is unlikely to alarm consumers accustomed to local whiskey or gin. In addition, the expert adds, the drink will cost significantly less than the imported one, and MPC will probably not have to pay royalties to the Kazakh copyright holder, given the common shareholders. The OPH did not answer Kommersant.

As Nikolay Zhelagin notes, localization will allow, first of all, to save on logistics, which can account for tens of percent in the cost of beer when supplied to Moscow from Kazakhstan. Production at a large plant like MPC can also be cheaper due to scale, he says. According to data available to Kommersant from market participants, in 2022, MPK reduced production by 9%, to 36.93 million decaliters, which Kommersant’s interlocutors in the market explained by the cessation of production of some global brands under license.

Igor Khavsky, co-owner of the distributor SWAM Group and the Gletcher brewery, notes that MPK can test the new brand not only in retail, but also in Asian restaurants. But, Mr. Khavsky warns, it is hardly worth talking about a serious volume of production and sales, especially at the first stage, and interest in “Asian” beer in the center of the Russian Federation may be limited.

Anatoly Kostyrev