Heineken said it had signed a deal to buy the Patra brewery in Yekaterinburg, Russia's third biggest city.
The move will consolidate Heineken's position as the number three brewer in Russia with a market share of 8.3 per cent. Yekaterinburg is also in the heart of the Urals region, which has a strongly emerging beer trend and now accounts for 17 per cent of the national market.
The Patra brewery has a sales capacity of one million hectolitres and the deal will hand Heineken strong local beer brands such as Patra, Strelets and Zhigulevskoye.
Meanwhile, US brewer Molson Coors has launched itself in Russia via a recent licencing deal with local company OOO PIT in Kaliningrad. Molson said it would spend $16 million on marketing its Coors Fine Light Beer over the next four years, principally in Moscow and St. Petersburg.
The moves by both brewers are the latest in a flurry of activity on the Russian beer sector, which recently saw deals to launch Foster's lager and Guinness through domestic leader Baltika and Heineken respectively.
Many international brewers, including Heineken, Scottish & Newcastle, SABMiller and Inbev have highlighted Russia as a crucial emerging market, even offsetting slower sales in established western countries.
Russia now has the fifth largest beer market in the world and has been the fastest growing in Europe since 1996, rising by around 18 per cent between then and 2003. Heineken estimated another seven per cent growth in 2004.
The sector's lightning growth has inspired a land-grab from big brewers, but the market faces a number of legislative and economic challenges that threaten to intensify competition and hamper progress in the near future.
Heineken predicted market growth would slow to 5.5 per cent, or 89 million hectolitres, in 2005.
The Russian government has just introduced a ban on outdoor drinking, which may put brewers under significant pressure due to the popularity of on-the-spot consumption of beer bought from street kiosks.
A number of brewers have relied on street kiosks for up to two thirds of their beer sales, but such kiosks have come under fire for fuelling alcoholism and vandalism among Russian teenagers.
The government has already tightened marketing restrictions by banning televised beer adverts between 17:00 and 22:00 and strictly regulating ones between 07:00 and 17:00. Companies say it is still too early to gauge the ban's effects on sales.
Continuing low wages may also stifle further growth as well as pressure brewers' margins. The average Russian earns around €195 per month, but there is great disparity with more than 25 per cent recorded as earning less than €62 per month, officially below the government's poverty line.
Despite this, premium beer continues to spearhead market growth, rising by 32 per cent in the first half of 2004, three times faster than the sector as a whole.
SAB saw Russian sales of its Miller Genuine Draft rise more than 80 per cent in the same period, though chief executive Graham Mackay said this was "not possibly sustainable".
Big opportunities undoubtedly still exist for beer in Russia, with consumption levels still around half that of the UK and analysts' predictions that the country, together with China, will constitute half of the global beer market by 2010.
The question is whether the growth rate is sufficient to cope with the rapid entry of all the world's major players over the next few years.