(Bloomberg) -- Carlsberg (CSE:CARLa) A/S is getting a warm welcome in Russia for its alcohol-free brewed drinks as high taxes weigh on customers’ thirst for beer.
Sales of nonalcoholic beverages have been gaining by double-digit percentages, reaching more than 10% of the Danish brewer’s revenue in the land of vodka over the past two years, Lars Lehmann, executive vice president for eastern Europe, said in an interview. Russia, Carlsberg’s second-biggest market, has been raising beer taxes gradually since 2009, which has cut sharply into sales.
Carlsberg (CSE:CARLa) recently began Russian production of Barley Bros, a brewed soft drink sold in flavors including lemon with mint and apple with green tea. The company’s Baltika 0 Grapefruit alcohol-free beer, a new variety of its Baltika 0 line, is also picking up sales there, according to Lehmann.
The offering is “for refreshment,” Lehmann said, “not just a beer for those who can’t drink alcohol.”
The products are riding a health-consciousness movement. While still a hard-drinking culture, Russia had one of the world’s sharpest decreases in alcohol consumption over the 12 years that ended in 2016, according to the World Health Organization.
Carlsberg (CSE:CARLa) has also been helped by sales of Flash Up, which it said was the leading energy drink in Russia with 20% of that market in the first half of the year.
Anheuser-Busch InBev NV is catching up to Carlsberg (CSE:CARLa) in Russian beer sales after having joined forces with Turkey’s Anadolu Efes. Alcohol-free drinks could also add to the Danish brewer’s profits the amid high levies on traditional beers, according to Lehmann.