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.
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