Russians set to boost brewers' earnings

Scottish & Newcastle Plc, the United Kingdom's largest brewer, may say today first-half profit rose after more Russian drinkers favored beer over vodka.

Pretax profit gained 9.1 percent to 204 million pounds including joint ventures from 187 million pounds a year earlier, the median estimate of five analysts surveyed by Bloomberg showed.

The Edinburgh-based company's sales climbed 5.6 percent to 2.10 billion pounds, according to the survey.

Scottish & Newcastle shares control of Baltic Beverages Holding AB, the owner of Russia's largest brewer, with Carlsberg A/S. The UK beermaker has looked to eastern Europe for growth as markets stagnate or contract in the western part of the region.

Baltic said last week second-quarter sales jumped 33 percent as higher salaries enable more Russians to seek out premium beers.

"BBH has been the fastest-growing part of the business, with strong profit growth on the back of a fast-growing market and steady share gains," said Trevor Stirling, an analyst at Sanford C. Bernstein in London with a "market perform" recommendation on the shares.

"In the UK, the picture is much more grim," added Bernstein.

Bloomberg News

(China Daily 08/07/2007 page16)