Welcome to the U.S.-Ukraine Business Council

Maria Aksyonova, Staff Writer, Kyiv Post, Kyiv, Ukraine, Thu, Nov 1, 2007

Leading German wine producer Henkell & Sohnlein has taken a majority stake in Ukraine's largest champagne producer further strengthening its already strong position in Eastern Europe.

On Oct. 17, the German company acquired another 25.7 percent share of
Kyiv-based Kyivsky Zavod Shampanskich Vyn Stolitschniy, boosting its
overall holding to 51.9 percent.

The factory produces 16 million bottles of Sovetskoye and Ukrainskoye
champagne annually, which constitutes a 25 percent share of the Ukrainian
sparkling wines market. In 2006, the company made just over $20 million by increasing its production volume by 9 percent.

Since the 1990's, Henkell & Sohnlein has expanded east from Germany
throughout the former communist bloc. The purchase of the Kyiv factory
is a strategic one, company officials said.

"Today the sparkling wine market leaders in Austria, Hungary, the Czech
Republic, Slovakia, and Romania are members in the Henkell & Sohnlein

In this context, the acquisition in Kyiv is an important and strategic one
because it adds a successful, market leading company in a very important
European market for sparkling wine to the H&S Group," said Jan Rock,
press spokesman for the Henkell & Sohnlein Group.

"[The Ukrainian factory's] sales of 16 million bottles of sparkling wine,
together with Henkell & Sohnlein's worldwide sales of 133 million bottles
will hopefully increase our foreign turnover considerably," Rock said.

H&S currently has subsidiary companies in nine European countries with total revenues for 2006 of $738 million, a 1.5 percent increase from 2005, with revenues of $727 million.

The cost of the acquisition has not been disclosed. The German company
acquired its first stake in the Kyiv champagne factory this summer.

H&S plans to invest more in the Kyiv factory and will take over sales and
distribution of the premium sparkling wine Ukrainskoye. In return, Kyivskiy
Zavod Shampanskich Vyn Stolitschniy will distribute Henkell & Sohnlein's
internationally established brands on the Ukrainian market.

LINK: http://www.kyivpost.com/business/general/27723/