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    InBev Buys Russian Brewer

    The Russian beer market is expected to grow 30 percent over the next five years.

    InBev, the brewer of Stella Artois and Rolling Rock beers, has agreed to buy Tinkoff, a Russian beer maker to increase production and meet rising demand in the growing Russian beer market., company executives said.

    The $201 million deal for Tinkoff would raise InBev's capacity in Russia by 60.7 million gallons, and add to operating earnings starting in 2006, said spokeswoman, Marianne Amssoms. The transaction is expected ti close in the second half of the year.

    "We had, of late, been experiencing constraints in serving our customers in Russia due to capacity restraints," InBev's senior vice president for external growth, Gauthier de Boilley, said in a conference call with analysts. "This brand is sold in high-end friendly places, and that for us is a more exciting position than access to a larger volume and a value brand."

    About 67 percent of Russian sales at InBev's Russian unit, Sun Interbrew, come from street kiosks, and about 30 percent of the beer sold is consumed immediately.

    Like its rival Heineken, InBev is accelerating expansion in Russia as sales fall in Western Europe, where slower economic growth and the introduction of smoking bans in bars have hurt demand.

    Russia is the world's second-fastest-growing beer market, after China. Beer consumption may rise 30 percent in Russia by the end of 2010, according to company executives as consumers with higher disposable incomes switch from vodka.

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