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4-2017

Global hop market

A local alternative to mass beer suggested by independent brewers has been successful and is now altering the global market. Beer is becoming more diversified, so transnational companies have to accept the new game rules and to switch focus to young and fast growing markets. All these processes increased the demand for aroma and bitter hop as well as their acreage expansion on two continents. However now there appeared a downward trend of alcohol consumption in the world, so even special sorts can soon turn to be sufficient. In this connection the dynamic American hop market is already facing some problems. EU hop producers have become more cautious, they are not racing to exceed the demand and look forward with more confidence, judging by the contract terms. 

Hop Market in Russia

Germany still dominates the Russian market, yet over the recent two years one has been able observe a continuous success of Czech hop suppliers. Their expansion and growing popularity of hops from the United States became the drivers of supplies growth in 2016 despite the preceding modest harvest crop in the EU, as well as the factor of relative stability in 2017. In this connection, in 2017, the ratio of the varieties continued to shift towards the aroma ones, and the supplies of Magnum hop and other alpha varieties were reduced. However, the import of bitter hop pellets is partially replaced by extracts, especially from the major beer manufacturers. Total volumes of alpha acid supplies, according to our estimation, decreased by approximately 5% and returned to the level of 2015. Barth Haas Group continues dominating the hop products market; HVG also increased its weight. At the same time, Morris Hanbury significantly reduced the supplies in 2017.

India. SABMiller likely to be back in black this year

SABMiller India, the country’s second largest beer company, expects to book profits in the current fiscal after two years of successive losses. It also hopes to increase market share in profitable states and grow in Andhra Pradesh, the largest beer market in India.
“The company is now focusing on states such as Maharashtra, Karnataka and Rajasthan and expects to end this fiscal with a 12% growth in cash profit,” said Sundeep Kumar, director, corporate affairs and communications, SABMiller.
The Indian arm of the London-headquartered beer-maker had posted a loss of R142 crore in 2009-10 largely because of shortage of supplies in Andhra, owing to its standoff with the state government over the price revision issue. It also had to grapple with regulatory issues in Uttar Pradesh in 2009.
While beer companies in Andhra Pradesh witnessed a price increase in early 2010, the state subsequently introduced a new procurement policy that SABMiller is still challenging in court on the grounds of discrimination
The policy under which state-run wholesaler Andhra Pradesh Beverage Corporation procures stock based on a company’s national market share benefits rival United Breweries, which accouned for 50% share of India's annual beer sales of around 200 million cases in 2009-10.
SABMiller has traditionally dominated the AP market but its national share is around 30%.
“We are happy with the growing share in the more profitable markets and segments which we have been doing. While this has not completely offset the impact of the adverse Andhra procurement policy, it is helping us significantly dilute its impact,” said Kumar.
He did not, however, reveal the company's market share in key states. In India, beer and spirit market profitability varies among the states as some allow free pricing while others control retail sales through government-run outlets. According to SABMiller, Karnataka is a profitable state despite its neighbours like Andhra Pradesh and Tamil Nadu selling higher volumes. “I think circumstances like this force you to revisit your thinking,” added Kumar. “It also tells you you cannot be dependent on one or two markets given the vagaries of our regulatory environment.”
13 Mar. 2011

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