Orkla Brands, the Norway-based food group, has warned that demand will remain weak in Russia and in the Baltic states in 2010.

The company, which has operations in Russia and the Baltic, as well as in Scandinavia, today (11 February) posted rising fourth-quarter profits despite "difficult" market conditions.

However, executive vice president Torkild Nordberg said Orkla's local businesses in Russia had faced heightened competition in the fourth quarter.

"In Russia, we saw considerably more price pressure being exerted by the low-price companies, not least during Christmas," Nordberg said.

He said Orkla expected Russia and the Baltic states to remain "demanding" in 2010. "This didn't show any sign of improvement in the fourth quarter - quite to the contrary in fact," Nordberg remarked.

He added that Orkla could also see commodity costs in Russia rise this year. "We expect raw material prices to be fairly neutral in the EU but we expect to see further increases in Norway and Russia."

Orkla owns Russian chocolate and biscuit makers SladCo and Krupskaya and a clutch of businesses across Estonia, Latvia and Lithuania.

Estonia's AS Põltsamaa Felix is the market leader in ketchup, mustard, mayonnaise and preserved vegetables.

Orkla's SIA Spilva produces tomato sauces, mayonnaise and preserved vegetables in Latvia, while in Lithuania, UAB Suslavicius-Felix makes ketchup and margarine products.