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.
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.
Russia. Baltika Breweries share buy-back oversubscribed
On 28 April 2011, Baltika Breweries announced the decision of its Board of Directors to buy back its registered shares.
In accordance with the Procedure and conditions for purchasing registered shares of Baltika Breweries, applications were accepted from 01 June 2011 to 20 June 2011, inclusive. Shares were priced at RUB 1407 for one ordinary share, and RUB 1286 for one A-type preference registered share. This allowed the company to offer its shareholders an opportunity to sell their shares at a premium, without brokerage and stock exchange charges, commission fees, and other expenses related to the sale of securities.
All shareholders of the company — owners of ordinary shares, as well as owners of preference shares — were able to submit a share buyback application, regardless of the number of shares they owned.
The share buy-back was successfully oversubscribed as Baltika Breweries has received share buy-back applications amounting to 7% of its share capital which exceeds the maximum of RUB 11.5bn, or 5% of its share capital, that was allocated to the share buy-back.
Since the total price of ordinary and preference shares offered for buyback exceeds the maximum amount of funds earmarked for the share buyback procedure, a share buyback ratio has been established at 0,8701 for ordinary shares and 0,5355 for preference shares.
In the period from 22 June through 22 July 2011, inclusive, corresponding purchase contracts will be signed with the company’s shareholders who submitted their shares for sale.
The shares bought during the buyback should be sold at market price or cancelled with a corresponding decrease of the share capital of the company within 12 months after the buyback.
It is the current intention of Baltika Breweries within the said 12 months' period to propose to the General Shareholders' Meeting that the shares bought back during the share buy-back to be cancelled and reduce the Company's charter capital. This will improve the company’s capital structure and increase earnings per share which is anticipated to positively impact the investment attractiveness of the company and consequently benefit all shareholders.
Baltika’s major shareholder, Baltic Beverages Holding AB (subsidiary of Carlsberg Breweries A/S, Denmark) participated in the buy-back in line with the maximum amount allocated to the buy-back. When such cancellation happens and due to the over-subscription Baltic Beverages Holding AB's holding of company's capital will increase insignificantly.
The company’s issued share capital consists of 151,714,594 ordinary shares and 12,326,570 A-type preference shares. The nominal value of each ordinary and preference share is RUB 1. The company’s issued share capital totals RUB 164,041,164.
For the last several years the company’s shares (ordinary and preference) have been traded on stock exchanges and over-the-counter markets. The shares are traded on two Russian trade stock exchanges: the RTS Exchange (since 2001) and the MICEX Stock Exchange (since 2003). At present the company’s shares in circulation on the stock exchanges are listed in the ‘Listed Securities Not Included in Quotation Lists’ section of the catalogue.
28 Jun. 2011