The beer market dynamics in Russia is approaching zero, yet major brewers are divided into those who developed considerably in 2017 and those who considerably reduced their volumes. For instance, company Efes has managed to substantially extend their sales due to restrained pricing policy and activity in the modern trade. Heineken has also demonstrated an excellent performance promoted by significant increase of advertisement budgets launching a non-alcohol sort of the title brand and unusual activity in the economy market segment. Carlsberg and AB InBev have been focusing on margins and lost a market share of their inexpensive brands. Serious dependence on PET package and mass enthusiasm about Zhigulevskoe have negatively impacted the most of big regional brewers, that have been for the first time pressed by the leaders in the key sales channels, especially in Volga and Central regions. In the small business there has been a noticeable slowdown in appearing of new restaurant breweries, yet the number of craft breweries has been growing rapidly. In 2018, the beer market is likely to grow a little, while the share of AB InBev Efes may decrease due to the integration. ...
“Catalogue of Russian Beer Producers 2018” includes 1070 businesses ranging from large subsidiaries of international companies to rather small restaurant and craft microbreweries.The catalogue includes 32 large breweries, 75 regional breweries, 693 industrial mini- and microbreweries as well as 270 restaurant breweries. ...
Global hop marketA 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 RussiaGermany 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.
Heineken Outbids Breweries for Bedele with $85.2m
Heineken’s offer of 85.2 million dollars for the acquisition of Bedele Brewery exceeded those of three other breweries, while it was the only bidder for Harar Brewery.
The technical proposals and financial offers of bidders for the acquisition of these breweries along with six other state owned companies offered for sale in the same tender are being evaluated by the board of the Privatisation and Public Enterprises Supervising Agency (PPESA).
The bids for the tender, which was floated on January 26, 2011, was opened on March 19.
Bedele Brewery, located 500km west of the capital, in Oromia Regional State, was first opened in 1993. With an annual production capacity of 75 million bottles, it exports beer with a 4.2pc alcohol content to the United States (US).
Aside from the offer from Heineken, Bedele received offers from Carlsberg Brewery (68 million dollars), BGI Ethiopia (64 million dollars), and South West – SABMiller (70 million dollars).
Harar Brewery, located in Harar 526km east of Addis Abeba, was established in 1993. Its annual production capacity of 67 million bottles makes it the second largest producer of beer in Ethiopia, after Bedele. Heineken offered 78.1 million dollars for its acquisition.
The Amstel-Heineken brand is one of the largest in the world. It brews and sells more than 200 international, regional, local, and specialty beers and ciders. This includes Primus, Birra Moretti, Sasres, Cruzcamp, Foster’s, Strongbow, Bulmer, Newcastle Brown Ale, Zywiec, Ochota, Kingfisher, Tiger, Dos Equis, Star, Tecate, and Sol.
Heineken NV was formed in 1952 and bears the founder’s family name, Heineken. In 2010, the company achieved a net profit growth of 19.7pc, and it has 140 breweries in more than 70 countries.
The PPESA, which has received 1.5 billion Br from transferring 287 companies and 16 companies through lease and joint venture (JV) agreements, respectively, to the private sector during its 15-year existence, initially planned to sell the three state owned breweries, including Meta Abo Brewery, in the next three years, according to the agency’s five-year plan.
However, due to the high demand from the private sector, the agency pushed the sale forward. The results for the tender floated on the sale of Meta Abo are yet to be announced.
PPESA’s process to privatise the breweries is only part of a larger mass privatisation effort. In January, Awash Winery, Awasa and Tigray flour factories, Kokeb Flour & Pasta Factory, as well as Gibe I Agricultural Development Enterprise were put up for sale for the first time by the agency, which has facilitated the privatisation of 73 companies and their branches over the past five years.
Kokeb Flour & Pasta Factory received six offers. ATL Trading Plc offered 55.3 million Br, Muler Industrial Plc offered 43.2 million Br, Centre General Trading Plc offered 41 million Br, Tamira Plc offered 35.7 million Br, and Al-Buruj General Trading offered 35 million Br. Tekelye Yezengaw, an individual bidder, offered 37.4 million Br.
Tigray Flour Factory received an offer of 11.5 million Br from Green Coffee Plc, and one of 12.5 million Br from Muler Industrial. Awasa Flour Factory attracted one bidder, ATL Trading, which offered 49.2 million Br.
Tabor Ceramic Products was up for sale for the third time. It did not receive an offer when the tender for its acquisition was first floated. However, it was awarded to Amaga Plc for 60.2 million Br during the second time, but the bid winner failed to pay the required 35pc of the total offer as a down payment to the agency and it was not transferred.
In the latest tender, it failed to receive an offer, alongside Awash Winery and Gibe I Agricultural.
The sale of the companies requires simultaneous submission of the technical proposals and financial offers, which are evaluated by the PPESA board. Upon winning and paying the deposit, bid winners have five years to pay the outstanding amount.
However, one of the basic requirements of the bid is for the bidder to possess the financial capacity to administer and enhance the company’s potential.
For this reason, it is likely that all the highest bidders will be awarded the companies, a consultant, who had prepared the financial proposals for some of the bidders that participated in past tenders issued by the PPESA, told Fortune on condition of anonymity due to non-disclosure agreements with clients.
The bid winners are also required to retain the employees of the privatised companies. To date, a total of 32,500 employees have been transferred along with the former state owned enterprises.
5 Apr. 2011