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.
General Court annuls the €31.66 million fine imposed on Grolsch
On that market the brewers sell their beer to end users mainly through two distribution channels: the “on-trade” segment (hotels, restaurants and caf?s), where consumption is on the premises, and the “off-trade” segment (supermarkets and off-licences), where the beer is purchased for consumption at home.
The infringement found by the Commission consisted of the coordination of prices and price increases for beer and the allocation of customers, both in the on-trade segment and in the off- trade segment in the Netherlands, and the occasional coordination of other commercial conditions offered to individual on-trade customers in the Netherlands.
The Commission imposed a fine of €31.66 million on Koninklijke Grolsch NV.
That company subsequently brought an action before the General Court seeking annulment of the Commission’s decision or a reduction in its fine.
Koninklijke Grolsch NV in essence denied that it participated directly in the infringement. It argued that the employees of its wholly-owned subsidiary, Grolsche Bierbrouwerij Nederland BV, attended most of the meetings at issue and that consequently the Commission should not have found that Koninklijke Grolsch NV participated in the infringement but, if appropriate, should instead have attributed liability to it for an infringement committed by its subsidiary.
First of all, the Court considers certain documents concerning the meetings between the companies and concludes that the evidence available to the Commission was not sufficient to establish the direct participation of Koninklijke Grolsch in the cartel.
The Court goes on to observe that where, as in the present case, a decision concerns a number of addressees and raises a problem of attribution of liability for the infringement identified, it must include an adequate statement of reasons with respect to each of the addressees, in particular those of them who, according to the decision, must bear the liability for that infringement. Thus, in the case of a parent company held liable for the conduct of its subsidiary, such a decision must contain a detailed statement of reasons for attributing the infringement to that company.
According to settled case-law, in the specific case of a parent company holding 100% of the capital of a subsidiary which has committed an infringement of the competition rules, there is a rebuttable presumption that that parent company actually exercises decisive influence over the conduct of its subsidiary.
In those circumstances, it is sufficient for the Commission to show that the entire capital of a subsidiary is held by the parent company in order to presume that the parent company exercises decisive influence over the subsidiary’s commercial policy. The Commission will then be able to hold the parent company jointly and severally liable for payment of the fine imposed on the subsidiary, unless the parent company, which has the burden of rebutting that presumption, adduces sufficient evidence to prove that its subsidiary acts autonomously on the market.
The Court states that, in the present case, the decision treated the parent company, Koninklijke Grolsch NV, and the Grolsch group as one and made no mention of the economic, organisational and legal links between the parent company and its subsidiary, whilst nowhere in the statement of reasons was the subsidiary’s name mentioned. The Commission therefore failed to explain the reasons which led it to determine the legal person responsible for running the undertaking at the time when the infringement was committed, so as to enable that person to answer for the infringement or, as the case may be, rebut the presumption that the parent company actually exercised decisive influence over the conduct of its subsidiary.
The Court finds that the Commission failed to explain, in the decision, its reasons for attributing to Koninklijke Grolsch NV the conduct of its subsidiary, which followed from the participation of the subsidiary’s employees in the meetings at issue. It thus denied the parent company any opportunity to reverse the presumption and thereby challenge the merits of that attribution before the Court and did not enable the Court to exercise its power of review in that regard.
Consequently, the Court decides to annul the Commission’s decision in so far as it concerns Koninklijke Grolsch NV.
20 Sep. 2011