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.
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