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.
San Miguel Says to Stay Listed After Ang Says Brewer May Be Taken Private
“San Miguel shall remain listed, owing to its iconic status in the country,” the Philippines’ largest listed company said today. The statement, citing Ang, was issued in response to queries, it said. San Miguel said it also “contemplates” to list all its operating subsidiaries, including new businesses.
Ang said in an interview yesterday that if he has his “way,” San Miguel will buy back its shares and become privately held by next year. Buying back the shares may cost about $800 million, he said. San Miguel had a public float of 14 percent as of May 5, it said at the time. That’s worth about 40 billion pesos ($943 million) based on today’s share price.
“A listed company has more advantages than a privately held corporation in terms of financing and attracting investors,” said Astro del Castillo, managing director at Manila-based First Grade Finance Inc.
The food and beverage company that’s expanding into oil refining, power retailing and infrastructure is also in talks to buy an overseas company with an enterprise value of $10 billion, Ang said yesterday. The target has a “potential free cash flow of between $2 billion and $3 billion a year,” he said. The discussions may take “a few more months,” Ang said.
Return on Equity
Compliance with the Philippine Stock Exchange’s requirements on disclosures has sometimes made it difficult for San Miguel to make purchases, Ang said yesterday. The Philippines’ most acquisitive company, which started as a brewer more than a century ago, seeks to triple the 7 percent return on equity it gets from its traditional food and drinks businesses.
San Miguel rose 1 percent to 122 pesos at the close of trading in Manila, paring gains after rising as much as 2.7 percent earlier. The stock has lost 26 percent this year, compared with a 3.7 percent gain for the Philippine Stock Exchange Index.
“If your balance sheet is strong like San Miguel, you don’t need to be publicly listed,” Ang said yesterday at the company’s headquarters in Manila. “If I have my way, I will privatize it next year,” he said.
Listed companies are more prone to “leakage” of information, and disclosures sometimes work to the advantage of competitors, Ang said in the interview.
San Miguel had 127 billion pesos in cash and near-cash items as of June and has a total of 186 billion pesos of bonds and loans due by 2019, according to data compiled by Bloomberg.
The company’s units such as Petron Corp. (PCOR), the country’s biggest refiner, and San Miguel Brewery Inc. (SMB) will probably remain listed, Ang said yesterday.
Ang declined to provide more details on the acquisition target such as which industry it operates in or where it’s based.
9 Sep. 2011