St. Petersburg (18.11.2000 - Juhani Artto) The Vena Brewery is one of St. Petersburg's scarce foreign-owned production facilities. A two-thirds interest in this 450-employee enterprise is owned by the Denmark-based global concern Carlsberg, while one-third is owned by the European Bank for Reconstruction and Development (EBRD). Carlsberg recently became Vena's majority shareholder by acquiring Sinebrychoff, a company with a long history of brewing in Finland.

Since 1994 Vena has invested almost USD 100 million in increased production capacity to respond to the rapidly expanding Russian beer market. In the middle of this heavy investment programme Russia's August 1998 economic slump took this profitable enterprise into the red. Despite this setback, its Executive Director Sergei Khudoleev is cautiously optimistic of restored profitability in 2001.

Russian annual average beer consumption has increased rapidly from less than 20 litres per capita to 30 litres last year. Forecasts promise continued growth in this sector.

Another Scandinavian-owned brewery, Baltika, with its 15 per cent market share, is the number one beer producer in the whole of Russia. Baltika has also concentrated its production in St. Petersburg.

Since 1993 Baltika has expanded its production capacity even more than Vena, with total investments exceeding USD 200 million. Interestingly, Baltika is one of St. Petersburg's main taxpayers, contributing USD 133 million to the local public economy in 1997.

The benefits of the city's modern brewery industry are also based on its relatively high pay levels. Average wages and salaries at the Vena brewery are more than USD 100 per month. This is above average for St. Petersburg industries. The pay level is one factor behind the low annual staff turnover at Vena, which is currently only two or three per cent. Another explanation is the difficult situation in the labour market. While the unemployment rate is officially seven per cent, the true situation is far worse than this.