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.
Baltika Breweries announced an Extraordinary General Shareholders’ Meeting, which will take place on 01 September 2011.
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.
Shares will be converted at the ratio of 1:1, namely: one A-type preference share will be exchanged for one ordinary share. The impact of the conversion for shareholders will be the following:
A-type preference shareholders will receive ordinary shares and will consequently keep their ownership in Baltika Breweries unchanged.
A-type preference shareholders will receive ordinary shares and will consequently have the right to vote at the company’s shareholders’ meetings on all issues.
There will be no changes for shareholders of ordinary shares.
By merging the two share classes, Baltika optimizes a structure of the share capital that is complicated and requires definite administrative costs. The current structure is unclear to shareholders, both in terms of voting rights, and rights to dividends.
Historically preference shares have been used by companies during privatization to guarantee a certain small dividend for shareholders. As Baltika is in a strong financial position and is an adequately capitalized company, the Board of Directors believes that the preference share class is an unnecessary structure.
The merger of the two share classes into one is anticipated to have a positive impact on the trading liquidity of Baltika shares.
In recent years, the Board of Directors has recommended paying identical dividends to preference and ordinary shares. The Board will consider the implementation of a differentiated dividend for ordinary versus preference shares in accordance with the company charter if the conversion is not successfully approved by the EGM. The minimum amount of dividends on preference shares is set in the company’s charter, and cannot be below the annual Sberbank interest rate on deposits +10%, calculated for the nominal value of a share (RUB 1).
On 14 July 2011 market share price per one ordinary share amounted 1297.80 rubles and per one preference share — 1203.30 rubles*. Over the last few years, Baltika has traded registered and unregistered shares (both ordinary and preference). In Russia, the company’s shares are sold on two trading platforms: the RTS Exchange (since 2001) and the MICEX Stock Exchange (since 2003). Currently, the company’s shares are listed in the ‘Listed Securities Not Included in Quotation Lists’ section of the catalogue.
* MICEX data
19 Jul. 2011