10+1 trends of Russian beer market 2015-2017Despite of the moderately negative prognoses for 2017, the beer market can be stabilized soon. Yet the years of the negative dynamics have resulted in marketing being limited just to “optimization” and the art of balancing between price and volumes. Bigger supermarkets share means stronger trade marketing. These processes are connected to the majority of the described trends. At the same time, the federal brands inflation leads to searching for new tastes, sales channels and contact formats that expand the product range and diversify the beer market, but do not imply a substantial volume increase. Let us enumerate and further discuss the ten trends of the beer market we can see in 2015-2017 as well as the major event of 2017.
Beer market of Ukraine 2017In the first half of 2017, the Ukrainian beer market goes on decreasing slowly. Yet, the companies manage to compensate their lost volumes by raising prices and improving the sales structures. This results in the mid price market segment reduction while the sales of premium brands are rising. These processes are connected to position strengthening of companies Carlsberg Group and Oasis and the market share reduction of Obolon. Most of the novelties by the market leaders belong to craft or hard lemon categories.
Beer market of Russia 2016: PET goes to draftThe beer market of Russia was warmed up by the hot summer, but the preparation for large volume PET prohibition has already impacted it negatively. The year was successful for Efes, MBC and regional producers; Carlsberg’s positions were virtually stable but AB InBev and Heineken lost a part of market share having focused on the sales profitability. The dynamics of big brands was determined by how much the companies were willing to keep the prices down or by their promotional activity. In this context the economy segment of the beer market and sales of inexpensive draft beer were increasing. The premium segment started shrinking due to license brands migrating to the mainstream segment.
Beer market of Vietnam: “Young tiger”Vietnam is one of the few big beer markets that continue to grow steadily. The beer popularity results from its low price, street consumption culture, and social motives. The outlooks of beer market as well as the Vietnamese economy inspire optimism, though the country is heavily dependent on export of goods. The state regulation can be called liberal, but the key risk for brewers is harbored in intensive rising of excise. Within TOP-4 there are two leaders, Sabeco and Heineken that grow at the fastest rates. The first company effectively employs its capacities, the second one focuses on marketing technologies. Almost 80% of the market belongs to century-old brands, yet the middle class and the youth are shifting their interest toward international premium that is growing taking share from the mainstream.
Global brewer under tax lens
Logan Wort, an executive secretary of the African Tax Administration Forum (Ataf), raised the issue yesterday at a tax summit arranged by Deloitte, without identifying the company. He said the decision to discuss the company’s operations followed a report by anti-poverty group ActionAid.
Wort said the five countries were South Africa, Zambia, Tanzania, Ghana and Mauritius. The latter all had bilateral tax treaties with South Africa.
In the report, which was released in November last year, ActionAid accused SABMiller of “dodging an estimated $31 million (R206m) of taxes in Africa and India every year – enough money to educate a quarter of a million African children“. The report referred to “tax avoidance activities, designed to comply with the letter of the law not break it, as in the case of tax evasion”.
ActionAid said it used the term to cover strategies that were “legally permissible but which ActionAid regards as ethically questionable”.
Nigel Fairbrass, a spokesman in London for SABMiller, said the ActionAid report was “poorly researched”. In a response when the report was released, SABMiller said the company did not engage in aggressive tax planning in any part of its operations. And it said the report included “a number of flawed and inaccurate assumptions”.
According to SABMiller, which has 16 breweries and 21 bottling plants in Africa, in the year ended March 31, 2010, the group reported $2.929 billion in pre-tax profit and group revenue of $26.350bn.
“During the same period, our total tax contribution remitted to governments, including corporate tax, excise tax, VAT and employee taxes, was just under $7bn – seven times (the amount) paid to shareholders.
“This amount is split between developed countries (23 percent) and developing countries (77 percent). In both Colombia and South Africa, we contributed over $1bn in taxation to each respective government’s revenues.”
ActionAid, however, said SABMiller avoided tax by holding valuable trademarks for African beers in Europe rather than in their country of origin. “The cost of using the trademarks helps eat into the profits in the African subsidiary, so less tax is paid there,” the organisation said.
The topic of Wort’s address yesterday dealt with challenges to African revenue administrations. Ataf, which now has 29 members, was set up in 2009 to help African countries strengthen their revenue bases through improvements in their administration systems.
Wort quoted research published in March last year by Christian Aid, on the losses to the developing world due to the mispricing of bilateral trade, a practice which enables companies to pay less tax by diverting income to low-tax jurisdictions.
Christian Aid, a relief and development agency, said mispricing caused a $1.1 trillion outflow from developing countries to the EU and US between 2005 and 2007.
Wort also quoted the 2010 Global Financial Integrity report, which said developing countries lost between $98 billion and $106bn a year – about 4 percent of their total tax revenue – due to false invoicing. Global Financial Integrity is a non-profit research and advocacy organisation.
Wort said, apart from “aggressive tax planning schemes” by multinationals, problem areas in Africa included politicians and high-net-worth individuals. And the large informal sectors in most African countries complicated the process of tax collection. Other challenges included high compliance costs and corruption.
6 May. 2011