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.
Analysis of beer market in China (on Russian)
Beer market of Ukraine: big three losing weightIn 2016, fast increase of excises and resulting price spike stood in the way of the beer market stabilization. Most of competition (as well as mass sorts) moved to the economy segment of the market. The biggest losses were incurred by the leading three, especially Obolon, which again experienced pressure after reallocation of Efes market share. However, one should already speak of TOP-4. Group Oasis CIS (PPB) became a strong player and competitor to transnational companies. Besides the net sales of many regional medium breweries look rather good and 16-fold cost reduction wholesale trade license for craft brewers opens up a possibility of rapid growth in 2017.
InBev may look at SABMiller
IN A global brewing industry marked by huge consolidation over the past decade, bankers are hopeful of an $80bn-plus deal to end all transactions between the industry’s two giants, Anheuser-Busch InBev and SABMiller.
If AB InBev buys SABMiller it could be the biggest cash takeover in history and would create a group brewing a third of the world’s beer. Analysts and bankers suggest 2013 as a likely time frame for a takeover that is seen as the final play in deal-making in big world brewing.
They say the world’s largest brewer, AB InBev, will not be deterred from making a move for SABMiller even after the second-largest brewer swallows up Australia’s Foster’s by the end of this year in a $10,2bn deal. A Foster’s deal may delay an AB InBev-SABMiller link-up by six to 12 months, pushing a possible deal to 2013, after AB InBev CE Carlos Brito said its debt would fall next year to levels that made further acquisitions possible.
A deal would close out a decade of rapid consolidation led largely by AB InBev and SABMiller and leave few remaining easy targets, with the remaining big global brewers such as Heineken and Carlsberg, as well as AB InBev, controlled by families, individuals or charity shareholders.
A deal would link AB InBev’s Budweiser, Stella Artois and Brahma beer brands with SABMiller’s Peroni, Miller Lite and Grolsch, and cause only major antitrust headaches in the US and China, which would force sell-offs in those markets. AB InBev swallowed Budweiser brewer Anheuser-Busch for $52bn in 2008 in the world’s biggest cash takeover.
"AB InBev has been built by a string of good merger and acquisition deals over the last decade, so the market is likely to support one final deal based on its impressive record," a banker says.
A potential tie-up would entail at least $13bn of disposals to get around antitrust issues in the US and China, but annual cost savings could top $1bn. Disposals would likely include the sale of SABMiller’s 58% stake in US brewer MillerCoors, probably to 42% co-owner Molson Coors, for about $9bn as MillerCoors’ near-30% US market share added to AB InBev’s 50% would be too much for US authorities.
A further move might be the sale of SABMiller’s 49% share in Chinese brewer CR Snow, to appease Chinese authorities as AB InBev already has a significant Chinese presence.
AB InBev’s ability to make deals pay is illustrated by its shares outperforming the DJ food and beverage index by about 45% since it sealed the Anheuser-Busch deal in late 2008, analysts say.
SABMiller’s two big shareholders include US cigarette maker Altria, which has a 27,1% stake as a legacy of SABMiller’s 2002 deal to buy Miller, and the Colombian Santo Domingo family with a 14,2% stake, which dates back to SABMiller’s deal to acquire South American brewer Bavaria in 2005.
27 Sep. 2011