(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 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 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 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.