From Vodka to Baltika: A Perfect Storm in the Russian Beer Market

Koen Deconinck and Johan F. M. Swinnen

in The Economics of Beer

Published in print October 2011 | ISBN: 9780199693801
Published online January 2012 | e-ISBN: 9780191731884 | DOI:
From Vodka to Baltika: A Perfect Storm in the Russian Beer Market

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This chapter documents the spectacular increase of beer consumption in Russia. Over the course of only a few years, beer has become the dominant drink in Russia, with consumption levels now close to European averages. This major shift is explained as the result of improvements in quality (due to FDI), advertising regulations and price changes, all of which combined into a ‘perfect storm’ that made beer a more attractive drink to Russian consumers. It is argued that consumers' choice of beverage is heavily influenced by their peers' behaviour. Once a critical mass of consumers adopted beer, these network effects led to more and more people drinking beer in subsequent years.

Keywords: beer; Russia; perfect storm; network effect; advertising; quality; FDI

Chapter.  6857 words.  Illustrated.

Subjects: Economic Systems

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