The chief executive of Russian dairy giant Wimm-Bill-Dann Foods today (4 September) warned that conditions in the Russian economy may worsen in the latter half of 2009.

Tony Maher, Wimm-Bill-Dann's CEO, said Russia's economy had yet to show the signs of recovery seen in some EU countries. He pointed to falling retail sales in July as evidence that the Russian economy remained weak and could worsen before the end of the year.

"There are some signs that the retail side is not recovering. We're coming out of the summer into the dark of the Russian winter and there a lot of people who say that the bottom has not been reached in Russia," Maher told analysts as Wimm-Bill-Dann issued its half-year results. "So far we have shown that we are managing the current environment better than expected but it's difficult to be predictive."

The dairy, juice and baby food maker booked a jump in second-quarter earnings, although a weak rouble weighed on half-year profits. Nevertheless, Wimm-Bill-Dann's shares were buoyed by a set of figures that included rising margins and higher net income on a constant-currency basis.

Maher said the company's dairy business - which accounted for almost 70% of the group's first-half revenues - had grown its market share in June and July, while key rival Danone had lost ground.

The Wimm-Bill-Dann boss said the company had also looked to combat investment in private label by the likes of X5 Retail Group, Russia's largest retailer, through the launch of cut-price dairy and juice lines. He insisted, however, that Wimm-Bill-Dann would look to provide value through its brands and not just focus purely on price.

"You can always go to X5 and get cheaper products than us but cheap is not what we want to be," Maher said. "Just because you are cheap doesn't mean that you are going to be successful. You need to deliver more than that. Companies like this are out there promoting brands, which keeps brands important to [consumers]."

Shares in Wimm-Bill-Dann had risen 10.9% to US$63.49 at 09:36 ET.