...Clampdown on Illegal Market: The performance of duty-paying vodka producers in Russia, including Synergy, was hit in 2015 by a stiffening of competition from illegal vodka producers, which benefited from consumers shifting to cheap vodkas priced at the minimum allowed level. However, at the beginning of 2016 the government took further action against illegal production, which led to a sharp contraction in sales of illegally produced spirits. As a result, Synergy's sales volumes went up by 18% yoy in 9M16 and even exceeded its results for 9M14. Rebound in Illegal Production Unlikely: We do not believe a revival in illegal production is likely as government measures were tough and some of them are yet to fully deliver results. We therefore project growth in Synergy's sales volumes at 18% and 8% in 2016 and 2017, respectively. Our projections also factor in the weakness of one of Synergy's major competitors, which should enable Synergy to increase its sales more than the market in 2016- 2017....
