BELARUS NEWS AND ANALYSIS

DATE:

03/11/2008

The Belarus Food Drink Report Provides Independent Forecasts And Competitive Intelligence On Belarus' Food And Drink Industry

DUBLIN, Ireland--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/59d432/belarus_food_and_d) has announced the addition of the "Belarus Food and Drink Report Q4 2008" report to their offering.

International investors have started to cautiously move into Belarus' food and drink retail sector. There is currently very little in the way of an organised retail sector in Belarus, with food and drink sales dominated by independents and traditional markets. However, mass grocery retail (MGR) is slowly starting to take off in response to the growing consumer demand in the country.

In late July, the International Finance Corporation (IFC) announced that it had signed an agreement to partner with A1 Group, a subdivision of Russian consortium Alfa-Group, to finance the expansion of a Belarusian retailer. IFC is providing MGR operator Belmarket with a US6mn loan facility to finance the launch of 128 stores in the country. A1 is a leading direct investment company in the Commonwealth of Independent States (CIS) region, investing in a broad range of industries, while the IFC, which is the private sector arm of the World Bank Group, is the world's largest multilateral financier for firms conducting business in emerging economies. With this funding, Belmarket will be able to establish itself as the country's first major retail chain. This will help increase competition in the local retail sector and improve operational efficiencies. The IFC has said that it is supporting this project as it will open new channels for small and medium producers in the country to sell their goods to reliable buyers and will also create major employment opportunities.

Meanwhile, in July 2008 Serbian retail conglomerate Delta Holdings' retail chain Delta Maxi and Russia's Finstar, controlled by Ritzio Entertainment Group, announced the establishment of a joint venture to develop a chain of hypermarkets and supermarkets in Ukraine and Belarus. Under the terms of the agreements, both companies will each invest approximately US700mn into opening a chain of Maxi supermarkets and Tempo hypermarkets over the next five years.

Given the country's poor business environment and international reputation, such investments are few and far between, but vital for the development of the country's nascent food retail sector. However, for growth in the sector to really take off, investments, such as those detailed above, will be crucial. Modern outlets have gained popularity, particularly with the more affluent, if still very small, middle class, due to the range and quality of products on offer, the high standards of hygiene and the reliability of supply.

This spread of MGR is also a major factor behind the growth in food consumption that we are witnessing. BMI expects per capita food consumption to rise by 39.5% between 2007 and 2012 to reach US7.71bn. The country's economic performance will also be a major factor behind this growth. Moving forward, we anticipate that GDP growth will come in at 7.8% this year, and we expect growth to remain robust throughout our five year forecast period, averaging 7.1%. If the economy continues to expand at such an impressive rate, it is likely that more international investors will dip their toes into the Belarusian food and drink sector.

Source:

http://www.earthtimes.org/articles/show/the-belarus-food-drink-report,606106.shtml

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