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Business news, 14.09.2004 15:14

Russia's Biggest Brewer Pulls Sponsorship

baltika_beer Under tough new legislation that went into effect earlier this month, beer advertisements cannot be used to promote sporting and cultural organizations, feature people or animals, or appear on television between 7 a.m. and 10 p.m.

Baltika, which is jointly owned by brewers Carlsberg and Scottish and Newcastle, had sponsored soccer's Champion's League to the tune of US$1.5 million and US$2 million (euro1.2 million and euro1.6 million) per year, the Kommersant business daily reported. That accounts for some 40 percent of the sponsorship revenue attracted by state-controlled VGTRK television company, which holds broadcasting rights and brokered the contract with Baltika, the paper said.

Baltika said Monday that the law was ambiguous, leading to concerns that the beer company could find itself in breach of the new law.

Baltika noted that the commercial benefit for the company would be largely lost since the brewery was pulling its ads as the championship was reaching a climax and attracts most attention from viewers.

Industry experts have warned that the moves, which reflect growing concern about youth drinking and alcoholism, would undermine sponsorship of broadcast sporting events as well as individual teams.

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