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.
China. NDRC Hauls in Beer Makers over Price Hikes
On March 31, the NDRC spoke to people from China Resources Snow Breweries Co. Ltd., Tsingtao Brewery Co. Ltd. (600600.SH), Beijing Yanjing Brewery Co. Ltd. (000729.SZ) and the China unit of Belgian Anheuser-Busch InBev NV (EBR:ABI).
Those four brewers have a combined 58% share of the country’s beer market.
In the face of rising raw material costs, local beer makers are planning to increase their product prices, and another round of price hikes is expected to take place from May, a person from a mid-sized domestic beer producer told the 21st Century Business Herald.
“Since February, the cost of beer production has risen by RMB 94 per ton, which explains the beer makers’ unanimous price hikes,” the person said.
Since January, CR Snow Breweries, China’s largest brewer by volume, has raised prices by more than 10% in Sichuan, Liaoning and Anhui provinces, where it enjoys a dominant position in the market.
Tsingtao Brewery also hiked prices of several products in the following months by an average of 10%, the company announced earlier.
The beer maker is considering another 5% hike for its core products this month, according to several industry analysts and market watchers.
“Costs of raw materials have been rising since the second half of last year, and then the cost of labor also went up by almost 30% since the beginning of this year,” said an industry insider.
The NDRC said it understood the position of beer makers given their rising costs, but said gains in liquor prices were inappropriate as liquor makers’ production costs had not risen by as much as those of brewers. The commission urged both beer and liquor makers to stabilize prices.
Prompted by rising inflation in China - the consumer price index (CPI) might have risen above 5% in March according to some analysts – government bodies are trying to take measures to contain or bring prices down. The central government is targeting a 4% increase in the CPI this year.
The NDRC has also talked to and investigated major consumer goods makers including Unilever Plc. (NYSE:UL) and the Procter & Gamble Co. (NYSE:PG).
Chinese media have been reporting that many manufacturers, P&G and Unilever included, are planning to increase the prices of cleaning and personal care items by 10% on average from April.
Questions have been raised by commentators as to whether some leading industry players are colluding to raise prices.
Consumer goods makers and food and drink enterprises have been invited by the NDRC to discuss putting off their price hikes.
Resigned to rising raw materials prices, brewers are figuring out new ways to offset higher costs.
“One way of countering the costs is to reduce beer capacity by as much as 100 milliliters for a 660-ml bottle,” said the head of a local beer company.
8 Apr. 2011