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.
Foster’s does not rule out takeover talks with SABMiller
* Says rejection of SABMiller bid did not mean it would not engage in talks
* Foster's rebrands beer business, tweaks name
* Shares trading barely above SABMiller's rejected offer (Adds analyst quotes, details)
Australian brewer and takeover target Foster's on Friday did not rule out takeover talks with suitor world No.2 SABMiller , but said the spurned $10.4 billion offer was so low it was not worth discussing.
Foster's new Chief Executive John Pollaers, facing a barrage of questions from analysts and shareholders at a business lunch, defended the board's decision to reject the deal and focus on restoring Foster's share in a declining Australian beer market.
"The value put on the table was so far away from reality that it wasn't worth engaging (with SABMiller)," Pollaers said.
But he added: "We are not saying that we would never engage. Our interest is the shareholders' interest."
Foster's, one of the last big prizes in a consolidating global beer market, has high margins and a 50 percent market share in Australia, where it brews the Victoria Bitter, Crown and Pure Blonde brands.
But it has been losing share as consumers switch from traditional brands to premium and craft beers, and on Friday Foster's launched a new logo, rebranding its main beer business with a minor change in name.
Pollaers said the brewer had the support of shareholders for its strategy of focusing on growing the business and not being distracted by the offer on the table.
But not all agreed.
"I would have thought if anyone approaches, you talk to them because you never know what can come of it," said Craig Young, portfolio manager at Tyndall Investment Management, which owns Foster's shares.
Reporting its first-quarter earnings last week, SABMiller, the maker of Miller Lite, Grolsch and Peroni, kept the market guessing if it will sweeten its bid.
Foster's rejected SABMiller's A$9.5 billion ($10.4 billion) offer last month and refused to enter discussions.
With no other bidders emerging since then, analysts have said SABMiller may be reluctant to bid against itself and could use Foster's upcoming annual results on Aug. 23 to put pressure on the Foster's board to negotiate.
SABMiller said in June it had shown no intention of going hostile, and it expected to engage the Foster's board in further talks.
It offered A$4.90 per share for Foster's, and after trading to a 10-month high of A$5.23, the shares have cooled in the absence of a rival bid to a slim premium over the offer price.
The shares dipped to A$4.98 on Thursday, recovering a bit on Friday to close at A$5.05, up 1.4 percent in a broader market down 0.9 percent.
STABILISED MARKET SHARE
Australia's beer market has declined in recent years, as consumers turn to wine and premixed drinks. But Foster's also has a large stable of traditional beers that are losing share to craft brands, and to main rival Kirin's Lion Nathan.
Pollaers said on Friday Foster's has stabilised its market share for the first time in 10 years and expects the beer sector to return to modest growth.
"We believe that once Australia moves through this period of economic uncertainty, the beer category will return to the long-term trend of modest growth," he said.
The past 12 months have been the most volatile the brewer has seen, mostly due to extreme weather conditions, including an unusually cool and wet southern hemisphere summer.
Pollaers took over as chief executive in May, after being the managing director of the beer business where he was the sixth chief in seven years.
"The company line is, Pollaers has to put his head down and he's got to regenerate the beer business and he has to put at the back of his mind the fact that SAB has approached them," said an analyst who declined to be named because he was not authorised to speak to the media.
Still, Pollaers answered questions for nearly half an hour, longer than his formal speech at the business lunch, and nearly all of them on the company's rejection of SABMiller.
Foster's has forecast its beer volumes in the latest six months to June would decline 3-4 percent, a slight improvement from the December half, but severe floods across eastern Australia earlier this year could have further weakened sales.
The brewer rebranded its beer business on Friday with a minor tweak to the brand name.
The beer business will be called Carlton United Brewers, a slight change from the original Carlton & United Breweries, in what Pollaers said was a renewed focus on beer following the split from the wine unit, Treasury Wine Estates .
TWE was listed separately on the stock exchange in May.
1 Aug. 2011