21 Mar 2023 15:33

FAS permits United Tea Company to buy Lipton's production assets in Russia

MOSCOW. March 21 (Interfax) - The Federal Anti-monopoly Service (FAS) has granted the petition of United Tea Company LLC on acquiring the fixed production assets and intangible assets of Ekaterra LLC, the FAS said in a press release.

Ekaterra LLC is the Russian subsidiary of the Netherland's Ekaterra, which produces the varieties of tea of Lipton, Saito, Brooke Bond, and others.

The FAS said that the deal would not result in restricting competition on the domestic tea market.

The FAS recalls that United Tea Company produces tea under the brand names of Eastford, Berryford, and Green Standard.

As reported, Ekaterra last summer announced its exit from Russia "owing to the current operating environment", and its intention to halt production of the Lipton, Saito, and Brooke Bond tea brands in Russia by the end of 2022. Unilever, which had owned Ekaterra, sold its tea division to CVC Capital Partners VIII in early 2022, with the deal totaling 4.5 billion euros.

According to the Unified State Registry of Legal Entities (USRLE), Alexander Konov is the principal owner of United Tea Company with a 50% stake, and Larisa and Alexander Pronin own another 25% each. Alexander Pronin is the general director of JSC Luzhniki. Kommersant reported that Konov is the director of the Pyotr Konchalovsky Foundation, established by directors Nikita Mikhalkov and Andrei Konchalovsky.

Ekaterra produced tea at a factory in St. Petersburg. According to the city's administration, the factory's capacity reached 16,000 tonnes of products per year in 2019.

According to the Roschaikofe tea and coffee association, the volume of the Russian tea market is approximately 140,000 tonnes per year.

According to data in the SPARK-Interfax analytical system, United Tea Company boosted revenue to 136.8 million rubles in 2021 from 121.8 million rubles in 2020, thereby generating net profit of 475,000 rubles against 756,000 rubles, respectively. Ekaterra LLC finished 2021 with revenue of 88.6 million rubles and net profit of 52.5 million rubles. Data for 2022 have not been released thus far.