Nestlé buys Russian bottler

- Last updated on GMT

Related tags: Moscow

Nestle has claimed the leading position in Russia's fast-growing
bottled water market after the Swiss group acquired Saint Springs,
the only bottled water blessed by the Russian Orthodox Church.

Nestle has claimed the leading position in Russia's fast-growing bottled water market after the Swiss group acquired Saint Springs, the only bottled water blessed by the Russian Orthodox Church.

Nestle Waters, the Swiss food giant's Paris-based bottled water division, said it has acquired 100 per cent of Saint Springs from private foreign investors for an undisclosed price. Analysts valued the deal at about $50 million (€50m).Nestle Waters described the move as "a big step" into a "very dynamic market" in which it expects rapid growth and consolidation over the next few years.

Saint Springs's rivals include PepsiCo's Aqua Minerale brand and Coca-Cola's Bon Aqua.

Russian juice maker Wimm-Bill-Dann, which raised $134 million in a US equity offering in February, has also announced plans to enter the bottled water market.

Renaissance Capital, which advised on the sale, hailed it as "yet again further proof of increasing global investors' confidence in the Russian market".

Saint Springs, whose name in Russian means "saintly source", claims the leading position in Russia with 108 million litres sold in 2001 and 10 per cent of the bottled water market by volume.

The water is extracted from underground springs near Kostroma, a town 350km north of Moscow, by agreement with the local eparchate of the Russian Orthodox Church.

John King, the American investor who founded Saint Springs in 1993, said the company's church affiliation was "very valuable"​, particularly in persuading local bureaucrats in the early 1990s to let the company start operating. Nestle Waters said the relationship was "fruitful"​ and would not change.

Each bottle of Saint Springs carries a signed message from Archbishop Alexander of Kostroma that says the water is and has been blessed by Patriarch Alexei II. The eparchate receives an undisclosed annual payment which it uses to renovate churches and monasteries.

Nestle Waters is the world's largest bottled water maker with a 16.3 per cent share of the global market and over €5 billion of sales in 2001. Its brands Perrier, Vittel and San Pellegrino have long had strong positions in the high end of the Russian bottled water market.

Nestle says it is also the market leader in Russia in coffee, chocolate, infant nutrition, and ice cream. The company previously bought four Russian confectioners and two ice cream plants, one of which it has expanded to produce dried soups and mayonnaise.

Related topics: Processing & Packaging

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