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"Alfa Group" takes "Borjomi" for sale2012-12-25 19:03
"Alfa-Group", which is planning to become co-owner of the producer of mineral water "Borjomi" IDS Borjomi, makes a purchase to resale the brand. The following year the "Borjomi" can register in Russia, and the deal to resell is likely to take place in two or three years, after the position of "Borjomi" strengthens at the Russian market. These findings come from Dmitry Abzalov, leading expert of the Center for Current Politics in Russia, while commenting GTimes the news of the possible acquisition of Georgian company by Russian consortium.
- Mr Abzalov, how significant thses news are - from the political and economical point of view?
- Certainly, the "Alfa Group" has plans to revitalize Russian-Georgian relations. I recall in November, the company "Borjomi" had requested the Rospotrebnadzor to return to the Russian market, and the Russian department has responded positively to this request. "Alpha" acquires the asset aiming at the emerging prospects for better relations. "Borjomi" is quite solid brand, it has very recognizable appearance. I think making this deal, "Alpha" is trying to diversify risks. I doubt that "Alpha" will fully own the asset. I believe that the structures have agreed in the interests of both sides. I understand that the current shareholders were interested in sale: Badri Patarkatsishvili's family has suffered quite serious financial losses and was aimed at the sale of the company. I think that "Alpha" is likely to register "Borjomi" in Russia next year, as soon as possible in order to return some lost ground in the Russian market, and in two or three years to sell a controlling stake to some major players in the field. Actually, in the market there are two such players - Pepsi and Coca-Cola. Both companies have recently become more active - for example the purchase of "Wimm-Bill-Dann" by Pepsi. The acquisition of "Borjomi" would help any of these players to become stronger in the segment of mineral water.
- Is such a script of the return of Georgian wines to Russia possible?
- I don't think this issue can be resolved soon. The fact is that in the Russian stores the Kuban wines have majorly replaced the Georgin in appropriate price range. In addition, they may have to compete with cheap American or Argentine wines.
- Do you regard the deal of the "Alfa Group" in the context of a general warming of relations between Russia and Georgia?
- Ironically, the economic relations between the two countries have never spoiled. Russia is supplying electricity through Georgia. In addition, Russia sold us "blue fuel". Many Russian businessmen owned numerous facilities and assets in Georgia ... So the political line is developing in parallel to the economical line. Yes, there were restrictions on access to the market, in transit through the country; but as for the assets, they have not been much affected by deteriorating relations between the two countries. And the fact is that today the economics can become a driving force in establishing a dialogue due to lower political barriers. Georgia's budget is suffering deficit now. Country largely lives at expense of serious external inflows. It is clear that in the near future international programs will decline, and Georgia will need to work out a scenario of further development. And, apparently, willy-nilly, it has to re-develop the Russian market.