Scottish & Newcastle and its former partner-turned-bidder Carlsberg appeared at odds yesterday over the prospects for their Eastern European joint venture.

Scottish & Newcastle and its former partner-turned-bidder Carlsberg appeared at odds yesterday over the prospects for their Eastern European joint venture.

The firms revealed that Baltic Beverages Holding (BBH), which is split 50/50 between the two, had seen beer sales rise 28.3% to 878m (£613m) and pre-tax profits rise 10.5% to 274m. BBH's prime asset is Baltika, the Russian beer firm of which it owns 85%.

However, the partnership is unravelling after Carlsberg combined with Heineken to put in a 720p-a-share bid for S&N last month and the latter went to an arbitration panel in Sweden in an effort to be handed control of the whole of BBH.

At dispute yesterday was the extent to which BBH's market in the Soviet Union is expanding. BBH raised its expectations for the Russian beer market to grow between 13% and 15% this year, up from 11% to 13%, but S&N finance director Ian McHoul said its agreement with Carlsberg meant that all he could say about the medium-term outlook was that the Russian beer market would grow 3% to 5% in future.

Analysts are convinced S&N believes this guidance is too low. A point S&N did nothing to contradict. "There is a clear conflict of interest regarding the information put out on BBH between us and Carlsberg," said McHoul.

He added: "In 2005 we had sales growth of over 20% and profit growth of 25%. In 2006 we had sales growth of over 20% and operating profit growth of over 35%. And you have seen today the first nine months of this year, with sales and operating profit both up around 33% (for the nine months to September 2007).

Carlsberg and Heineken plan to carve up BBH with the former taking S&N's 50% to gain 100% control. S&N also hinted that it expected Swedish arbitrators to set a price for any forced sale of BBH.

Carlsberg yesterday reported earnings before interest and taxes of 4.3 billion Danish crowns (£398m).